On 11 December 2025, the International Sustainability Standards Board (ISSB) issued key amendments to greenhouse gas disclosures, which resulted in targeted changes to IFRS S2 Climate-Related Disclosures. These amendments were designed to address implementation issues raised by preparers, particularly those related to the measurement of greenhouse gas emissions. The revised ISSB requirements clarify the scope of emissions that entities must disclose, while also reducing the operational burden associated with data collection, classification and measurement.

Why were the changes necessary?

The compilers' initial concerns focused mainly on the practicality of reporting all emissions within the category 15 scope 3. These emissions cover a wide range of financial activities that often do not clearly fall within existing emission financing methodologies. Measuring emissions associated with derivatives, facilitated financial transactions and certain insurance activities has been considered particularly challenging.

In addition, stakeholders highlighted implementation challenges related to the lack of explicit permission to use classification systems other than the Global Industry Classification Standards (GICS). Concerns were also raised about the lack of flexibility in using global warming potential (GWP) values other than those established by the IPCC.

To address these concerns, the ISSB published a consultation draft ISSB/ED/2025/1 proposing a series of amendments. The final amendments are effective for annual reporting periods beginning January 1, 2027 or later, with earlier application also permitted.

Key amendments

The final amendments to IFRS S2 provide substantial reporting relief.

1. Limitation of the Scope of Category 15 to financed issues

The key change is that the final changes allow entities to limit the measurement of emissions in scope 3 – category 15 to financed emissions only. This relief has been formalised as a scope limitation in IFRS S2 S2.29A. Funded issues include issues arising from loans, bonds, project finance, equity investments, undrawn commitments and managed assets. The amendments also explicitly allow entities to exclude issues related to derivatives.

2. Transition to qualitative disclosure

The original draft ISSB/ED/2025/1 required quantitative information regarding excluded derivatives and financial activities. However, the final version included significant change – quantitative disclosures have been removed. Entities that apply the relief and limit category 15 to financed issues only must instead provide only qualitative disclosures. They must describe the nature of the excluded activities and disclose what they consider to be derivatives for the purposes of applying the relief.

3. New requirement for totals and subtotals

The amendments introduce a new requirement for the presentation of scope 15 emissions. If an entity has included scope 15 emissions in its measurement of scope 3 emissions, it must disclose total greenhouse gas emissions category 15 and also subtotal of financed issues within this total.

4. Flexibility in industry classification

The ISSB has relaxed the original IFRS S2 requirement to use the GICS industry classification system for the disclosure of financed issues by sector. The new wording introduces a broader relief that allows the use of alternative industry classification system, if it results in more meaningful disclosure. Entities must disclose which classification system has been used and why it was chosen.

5. Extended jurisdictional reliefs

The amendments expand the jurisdictional relief for entities that are required by law or regulation to apply alternative methods for measuring greenhouse gas emissions or GWP values. This relief, which has been substantially unchanged from the proposal, may apply to the reporting entity as a whole or to a part of it, such as a subsidiary in a jurisdiction with such specific requirements.

Who is affected?

Changes related to financed issues will primarily affect financial entities with significant lending, investment or administrative activities. This is particularly true for banks, insurance companies, investment managers, pension funds and finance companies. Entities should carefully consider whether the changes could benefit their organizations by simplifying the application of the IFRS S2 requirements. These ISSB amendments represent an important step towards more practical and effective climate-related disclosures. JRi