The International Sustainability Standards Board (ISSB) has developed new guidance and reliefs for firms, as they will be required to disclose their material Scope 3 emissions in line with the board’s climate and general sustainability standards. During its December meeting, the ISSB agreed reliefs, such as a temporary exemption from Scope 3 disclosures for the first 12 months after the standards are finalised, so that companies have time to prepare. This additional guidance follows feedback from investors, who claimed they cannot fully understand a company’s transition risk without information on Scope 1-3 emissions. Additionally, the board agreed that disclosures on Scope 2 emissions must draw on a location-based method, “along with relevant information about contractual instruments in relation to managing purchased energy”. The ISSB has also confirmed it intends to refine proposed requirements for financed emissions. The standards are expected to be finalised next year. Addressing COP15 delegates in Montreal, ISSB Vice-Chair Sue Lloyd said: “We recognise that companies need help, as best practice continues to develop, in measuring Scope 3 GHG emissions. The ISSB believes the reliefs and guidance agreed this week will provide companies with the time to get their processes in place, and the guidance to support this disclosure.”
The #ISSB has set out a series of guidance and reliefs to support those applying the requirement within its Climate-related Disclosures Standard (S2) to disclose Scope 3 GHG emissions when material for a company.
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— IFRS Foundation (@IFRSFoundation) December 16, 2022