IR Society responds to proposed reliefs for GHG emissions disclosures under IFRS S2

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The Investor Relations Society has responded to the ISSB, welcoming the ISSB’s approach in proposing targeted amendments to IFRS S2 to clarify the application of GHG emissions disclosure requirements, as it aims to balance the need for high-quality, decision-useful information with the practical challenges that preparers face in data collection and reporting. The Society supported these reliefs as a pragmatic and proportionate evolution of IFRS S2, whilst emphasising the importance of maintaining a strong focus on consistency and transparency, and the need for clear disclosures about the methods, assumptions, and scope of emissions reporting.

                                                                                                                                                                                                                                                                                                     The Investor Relations Society

Office 605 Birchin Court, 20 Birchin Lane

London EC3V 9DU

By email: commentletters@ifrs.org

27^th June 2025

Dear Sir / Madam

Re: Exposure Draft Amendments to Greenhouse Gas Emissions Disclosures - Proposed Amendments to IFRS S2

Thank you for giving us the opportunity to respond to your exposure draft on the Proposed Amendments to IFRS S2. This response is made on behalf of The Investor Relations Society (‘the IR Society’).

The IR Society represents Members working for publicly listed companies and investor relations focused service providers, to assist them in the development of effective two-way communication with the markets. It has approaching 800 Members, drawn mainly from the UK, including the majority of the UK FTSE 100, many of the FTSE 250 constituents and some from AIM-listed companies, as well as those listed overseas.

The IR Society’s mission is to promote best practice in investor relations; to support the professional development of its Members; to represent their views to regulatory bodies, the investment community and Government; and to act as a forum for issuers and the investment community. 

Our response has therefore been primarily constructed through the lens of a corporate issuer, and as such reflects the views of those very much at the ‘coal face’ of investor engagement and reporting.

Overall, the proposed amendments represent a pragmatic and proportionate evolution of IFRS S2, and we welcome the ISSB’s approach in proposing targeted amendments to IFRS S2 to clarify the application of GHG emissions disclosure requirements, as it aims to balance the need for high-quality, decision-useful information with the practical challenges that preparers face in data collection and reporting.

Looking at some of the specific proposed reliefs, we would like to highlight the following points:

• the proposed relief regarding the measurement and disclosure of Scope 3 Category 15 emissions associated with derivatives and certain financial activities reflects a sensible recognition of the complexity and limited relevance of attributing emissions to specific financial instruments. Allowing flexibility in the use of alternative industry classification systems and jurisdiction-mandated measurement methods, where appropriate, ensures that disclosures are both achievable and aligned with regulatory environments. In our view, this approach does not undermine the overall objectives of comparability and transparency. This proposed relief is particularly welcome from a derivatives perspective given there is no agreed methodology from the Partnership for Carbon Accounting Financials.
• we note the proposed relief from the use of the Global Industry Classification Standard (GICS) in some circumstances, in disclosing disaggregated financed emissions information, is accompanied by the suggestion (in B62B) that an alternative industry-classification system is used if prescribed by the jurisdiction or exchange - this means the implications in the UK are currently uncertain as they will depend on how the UK Government and FCA endorse IFRS S2. We note the current proposals in the UK are to omit reference to GICS, with UK SRS S2 (paragraph B62 (a)(i)) providing that an entity “shall use an internationally recognised industry classification system (for example, a classification system that the entity uses for other regulatory or financial reporting purposes).”
• we acknowledge that jurisdiction-mandated GWP could work, although in our view it is not ideal as there is a risk of outdated Global Warming Potential figures being used compared to the more accurate and recently updated IPCC ones, which are revised more regularly. If allowances are adopted for using jurisdiction-mandated GWP values that are not based on the latest IPCC assessments, we would encourage the ISSB to require clear disclosures when such alternative GWP values are used, including an explanation of their source and any significant differences they may create in reported emissions.
• in relation to the proposed clarification on alternative methods for measuring GHG emissions (ie jurisdictional relief on using a measurement method other than the Greenhouse Gas Protocol), we note there is a degree of risk associated with straying from the established and recognised measurement methods (as we have noted in relation to GWP values above). However, if the proposal were to be accepted, this could be mitigated if the ISSB mandates a clear description of the alternative methodology used and/or why it has been used.

As a general comment, we would emphasise the importance of maintaining a strong focus on consistency and transparency. When reliefs are applied, it will be essential to provide clear disclosures about the methods, assumptions, and scope of emissions reporting. It would therefore be beneficial for the ISSB to consider strengthening the accompanying disclosure requirements to mitigate the risk of reduced comparability across entities and jurisdictions.

We hope you find these comments useful. Please do not hesitate to make contact if you have any questions.

Yours faithfully,

Liz Cole

Head of Policy and Communications, The Investor Relations Society

(Email: enquiries@irsociety.org.uk, Tel: + 44 (0) 20 3978 1980)

Laura Hayter

Chief Executive Officer, The Investor Relations Society

(Email: enquiries@irsociety.org.uk, Tel: + 44 (0) 20 3978 1980)

Ross Hawley

Co-Chair of the Policy Committee, The Investor Relations Society

(Email: enquiries@irsociety.org.uk, Tel: + 44 (0) 20 3978 1980)

Douglas Radcliff

Co-Chair of the Policy Committee, and Chair of The Investor Relations Society

(Email: enquiries@irsociety.org.uk, Tel: + 44 (0) 20 3978 1980)

Published 27 June, 2025