In a significant development for sustainability reporting, the International Sustainability Standards Board (ISSB) has released an Exposure Draft proposing targeted amendments to IFRS S2 Climate-related Disclosures. These changes are designed to support smoother implementation while maintaining the integrity and usefulness of disclosed information for investors.
Focus on Practicality Without Compromising Transparency
The proposed amendments reflect the ISSB’s ongoing commitment to easing adoption challenges, especially as organizations across industries adapt to new climate-related disclosure requirements. Rather than altering the core objectives of IFRS S2, the adjustments aim to reduce complexity and reporting burdens—helping entities achieve compliance without diminishing data quality.
Key Proposals Include:
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Relief from Scope 3, Category 15 GHG Emissions:
Entities engaged in certain financial activities may be exempt from disclosing financed emissions, a particularly complex category of Scope 3 reporting. -
Flexibility in Industry Classification and Methodology:
Organizations will be allowed to use appropriate industry classification systems and measurement approaches, improving alignment with existing reporting processes. -
Jurisdictional Flexibility on GWP Values:
Preparers may apply global warming potential (GWP) values mandated by their jurisdiction, allowing greater coherence with national requirements.
Consultation Period Now Open
Stakeholders have until 27 June 2025 to respond to the Exposure Draft. The ISSB welcomes feedback from reporting entities, investors, regulators, and civil society to ensure that the final guidance remains practical and effective.
Why It Matters
These proposed amendments come at a pivotal time as climate disclosure becomes integral to global ESG frameworks. By enhancing clarity and reducing reporting friction, the ISSB is taking a collaborative approach to standard-setting—balancing regulatory rigor with real-world application.
For sustainability professionals, staying informed and actively contributing to these consultations is vital. Collective feedback will help shape a disclosure ecosystem that is both actionable for preparers and insightful for investors.
At EcoActive, we continue to support businesses striving for transparent and sustainable reporting practices—whether mandated or voluntary.
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