ISSB publishes Exposure Draft proposing targeted amendments to IFRS S2 to ease application for companies

In response to market feedback, the International Sustainability Standards Board (ISSB) has published an Exposure Draft proposing targeted amendments to IFRS S2 Climate-related Disclosures that would provide reliefs to ease application of requirements related to the disclosure of greenhouse gas (GHG) emissions.

These proposed amendments, which respond to specific application challenges, are part of the ISSB’s commitment to support the implementation of ISSB Standards. The amendments are not focused on reductions in disclosures about GHG emissions but are instead making it easier for companies to apply the Standards while retaining the decision-usefulness of information provided to investors.

The Exposure Draft will be open for comment for 60 days with the comment period closing on 27 June 2025.

Sue Lloyd, ISSB Vice-Chair, said:

It is the role of a responsible standard-setter to listen to market feedback from the earliest implementation stages, and to support preparers in the application of our Standards. As a market-focused standard-setter, we have taken steps to respond in a timely manner by proposing targeted amendments helping preparers where possible, without causing too much disruption and ensuring that our Standards continue to enable the provision of decision-useful information to investors.

Proposing these amendments to a relatively new Standard is not a decision that was taken lightly—we have carefully considered the need for such amendments and have sought to balance the needs of investors while considering cost-effectiveness for preparers. Our due process is fundamentally important to us.  We always consult our stakeholders when proposing changes to our Standards and are balancing the need to respond to stakeholders’ needs on a timely basis with giving all interested parties the opportunity to participate in providing feedback by setting a 60-day comment period.

Clarifying GHG emissions measurement

The proposed amendments relate to the application of GHG emissions disclosure requirements in IFRS S2, including:

• relief from measuring and disclosing Scope 3 Category 15 GHG emissions associated with derivatives and some financial activities;
• relief from the use of the Global Industry Classification Standard (GICS), in some circumstances, in disclosing disaggregated financed emissions information;
• clarification on the jurisdictional relief to use a measurement method other than the Greenhouse Gas Protocol for measuring GHG emissions; and
• permission to use jurisdiction-required Global Warming Potential (GWP) values that are not from the latest Intergovernmental Panel on Climate Change (IPCC).

The ISSB agreed to propose these amendments in January 2025, informed by the discussions of the Transition Implementation Group on IFRS S1 and IFRS S2, and by the ISSB’s other engagement activities including dialogue with jurisdictions as part of their adoption processes.

With optionality embedded in the design of the amendments, entities can choose whether to apply the reliefs, and jurisdictions can choose whether to adopt them without affecting their degree of alignment with ISSB Standards.

The reliefs would support preparers in applying IFRS S2 by reducing the risk of potential duplication of reporting and the related costs associated with applying the Standards.  

Next steps

As part of its transparent and robust standard-setting process, the ISSB will move forward with final amendments after having gathered and analysed stakeholder feedback on the Exposure Draft. The ISSB aims to finalise these amendments by the end of 2025, subject to stakeholder feedback.

Companies currently applying IFRS S1 and IFRS S2 as issued in June 2023 can continue to do so, while jurisdictions that have their own Standards that are ‘based on’ ISSB Standards will be encouraged to maintain consistency to make it more straightforward for preparers globally to report on an efficient basis and to ensure the global baseline is maintained. 

Read and comment on the Exposure Draft

• Exposure Draft Amendments to Greenhouse Gas Emissions Disclosures
• Basis for Conclusions on Exposure Draft Amendments to Greenhouse Gas Emissions Disclosures
• Submit a comment letter or survey response on the Exposure Draft. The comment period closes on 27 June 2025.