The International Sustainability Standards Board (ISSB), convened under the IFRS Foundation, has announced targeted amendments to its greenhouse gas (GHG) disclosure requirements under the IFRS S2 climate-related reporting standard that aim to ease and clarify Scope 3 emissions reporting for financial firms.

The amendments focus on Scope 3 category 15 emissions — value-chain emissions associated with financial activities such as investment, lending, and capital-markets operations. Under the updated guidance, financial firms applying IFRS S2 may limit disclosures to financed emissions tied to loans and investments (or assets under management for asset managers), while omitting facilitated emissions from investment banking and insurance-associated emissions from insurance and reinsurance underwriting activities. Firms also may exclude emissions attributable to derivatives from their Scope 3 financed emissions reporting.

Additional changes grant relief from previously prescriptive requirements, including reducing reliance on the Global Industry Classification Standard (GICS) for disaggregating financed emissions information and permitting entities to apply jurisdiction-required Global Warming Potential (GWP) values or alternative greenhouse gas measurement methodologies when local regulation requires them.

ISSB Vice-Chair Sue Lloyd stated that the targeted amendments are intended to provide practical relief for companies applying the ISSB standards while preserving the decision-usefulness of climate-related information for investors.