ISSB proposes amendments to ease application of standards

The International Sustainability Standards Board today published an exposure draft proposing amendments to IFRS S2, "Climate-related Disclosures."

The proposed amendments provide reliefs to ease the application of requirements related to greenhouse gas emissions disclosures. It aims to make it easier for companies to apply the standards while retaining decision-useful information for investors. The exposure draft will be open for comment for 60 days and close on June 27. The amendments are slated to be finalized by the end of the year, subject to stakeholder feedback. 

"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," ISSB vice-chair Sue Lloyd said in a statement. "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."

The proposed amendments are as follows:

• 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, 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 values that are not from the latest Intergovernmental Panel on Climate Change.
  

The ISSB agreed to propose these amendments in January, following discussions of the Transition Implementation Group on IFRS 1 and IFRS 2 as well as the ISSB's engagement activities. 

Entities can choose whether to apply the amendments' reliefs, and jurisdictions can choose whether to adopt them without affecting the degree of their alignment with ISSB Standards. The reliefs would help preparers applying IFRS S2 by reducing the risk of duplicate reporting and the related costs associated with applying the standards.

"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," Lloyd said. "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."