ISSB Proposes Targeted Amendments to IFRS S2 to Ease Climate Disclosure Burden on Companies

In response to early implementation feedback, the International Sustainability Standards Board (ISSB) has published an Exposure Draft proposing targeted amendments to IFRS S2 Climate-related Disclosures. The proposed changes aim to ease the reporting burden on companies while maintaining the integrity and usefulness of greenhouse gas (GHG) emissions data for investors.

The amendments address specific challenges in applying IFRS S2 and are designed to make climate-related disclosures more practical and cost-effective for preparers—particularly in sectors dealing with complex financial instruments or varying jurisdictional standards.

Key Proposed Reliefs Include:

• Optional exclusion of Scope 3 Category 15 emissions (GHG emissions from investments in derivatives and other financial instruments)

• Flexibility in the use of the Global Industry Classification Standard (GICS) when reporting disaggregated financed emissions

• Permission to use local or jurisdiction-required Global Warming Potential (GWP) values, even if they differ from the latest Intergovernmental Panel on Climate Change (IPCC) guidance

• Jurisdictional relief allowing use of alternative methods to the Greenhouse Gas Protocol for GHG measurement

• Reduction in duplicative reporting efforts, minimizing compliance costs while preserving decision-useful information

Vice-Chair of the ISSB, Sue Lloyd, emphasized the importance of adaptability in standard-setting:
“We’ve taken a targeted approach to support preparers, balancing the cost of implementation with the needs of investors for consistent, comparable, and reliable information.”

Consultation Period and Next Steps

The Exposure Draft is open for public comment until June 27, 2025. Following the 60-day consultation, the ISSB will evaluate stakeholder feedback with the goal of finalizing amendments by the end of 2025.

Entities currently applying IFRS S1 and S2, issued in June 2023, can continue to do so. The proposed amendments are optional, allowing jurisdictions and preparers the flexibility to adopt them as needed without compromising alignment with ISSB Standards.

These changes mark the ISSB’s continued commitment to a pragmatic and globally consistent baseline for sustainability disclosures—essential for informed investment and capital allocation in the transition to a low-carbon economy.

To find out more details please visit :https://www.ifrs.org/