Financial Institutions May See Scope 3 Reporting Relief Under ISSB Proposals

The International Sustainability Standards Board (ISSB) proposed targeted amendments to IFRS S2 Climate-related Disclosures standard, followed by similar changes from the Australian Accounting Standards Board (AASB) to its climate-disclosure standard AASB S2, both introducing reporting reliefs for certain Scope 3 and financed emissions disclosures.

Financial institutions are expected to be impacted by proposed amendments related to the measurement and disclosure of Scope 3, Category 15 greenhouse gas emissions associated with derivatives, investment banking activities (facilitated emissions), and insurance and reinsurance underwriting (insurance-associated emissions). The amendments would also permit the use of the Global Industry Classification Standard for disclosing financed emissions.