The International Sustainability Standards Board (ISSB) Climate-related financial disclosure standards have become a global favorite, seeing widespread adoption across many jurisdictions since their introduction in 2023. Now, the ISSB is revising its IFRS S2 standard, publishing a new exposure draft exploring potential amendments. Most of the changes ease reporting burdens for financial services providers. These include changes to Scope 3 category 15 emissions, which ESG Today describes:
“Under the proposed amendment, entities would be permitted to limit disclosure to financed emissions, and exclude emissions associated with derivatives, facilitated emissions or insurance-associated emissions. In order to enable users of the reporting to understand the magnitude of emissions being excluded, the ISSB also proposed adding a requirement for companies to disclose the amount of derivatives or other financial activity being excluded from the Scope 3 disclosure.”
These proposed amendments fit with the global trend of scaling back and watering down disclosure requirements, which we’ve seen in the US, EU, and most recently Canada. The ISSB amendments appear minimally disruptive to the core reporting framework, and the changes aren’t drastic. However, these events taken together appear to indicate a weaker appetite for ESG disclosures globally as the rubber hits the road on mandatory disclosures. These amendments are not yet final, and may be commented on through the ISSB’s response form, which will be open until June 27, 2025.
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