Global: ISSB draft climate-related disclosure rules

The proposal aims to simply disclosure requirements of greenhouse gas (GHG) emissions.

The exposure draft specifically addresses the following:

• entities can exclude Category 15 Scope 3 GHG emissions, known as 'financed emissions' related to derivatives, facilitated emissions, and insurance-associated emissions from their GHG emissions measurement and disclosure
• entities can measure their GHG emissions using methods other than the GHG Protocol if required by a jurisdictional authority or an exchange
• entities can use Global Warming Potential (GWP) values that are not from the latest Intergovernmental Panel on Climate Change assessment, provided that such GWP values are mandated
• the exposure draft introduces flexibility in using Global Industry Classification Standard (GICS) codes for disaggregating financed emissions by industry, particularly for entities engaged in commercial banking and insurance

The ISSB is expected to finalise the amendments by the end of 2025. Once finalised, an effective date for the new rules will be published.

Importantly, entities currently reporting under the International Financial Reporting Standards S1 and S2 as issued in 2023, can continue doing so without interruption. Jurisdictions that have adopted or are aligning their national standards with ISSB guidelines are encouraged to maintain consistency with this planned amendment.

In preparation, entities should consider:

• evaluating how the ability to exclude certain Scope 3 GHG emissions and use alternative GHG measurement methods will impact your current reporting processes
• if your jurisdiction mandates specific GHG measurement methods or GWP values, ensure compliance by aligning your reporting practices accordingly
• revising internal policies and procedures to incorporate the new flexibilities, such as using GICS codes for disaggregating financed emissions