𝐈𝐒𝐒𝐁 𝐑𝐞𝐥𝐞𝐚𝐬𝐞𝐬 𝐀𝐦𝐞𝐧𝐝𝐦𝐞𝐧𝐭𝐬 𝐭𝐨 𝐈𝐅𝐑𝐒 𝐒𝟐: 𝐊𝐞𝐲 𝐂𝐡𝐚𝐧𝐠𝐞𝐬 𝐟𝐨𝐫 𝐒𝐜𝐨𝐩𝐞 𝟑 𝐚𝐧𝐝 𝐅𝐢𝐧𝐚𝐧𝐜𝐞𝐝 𝐄𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐬

The International Sustainability Standards Board (ISSB) has finalized targeted amendments to IFRS S2 Climate-related Disclosures as of December 2025. These changes are significant for financial institutions and companies preparing for mandatory climate reporting, specifically regarding the complex "Scope 3, Category 15" disclosures.

Here are the four critical updates you need to know:

𝟏. 𝐒𝐢𝐦𝐩𝐥𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐅𝐢𝐧𝐚𝐧𝐜𝐞𝐝 𝐄𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐬 (𝐒𝐜𝐨𝐩𝐞 𝟑, 𝐂𝐚𝐭𝐞𝐠𝐨𝐫𝐲 𝟏𝟓)

• 𝐓𝐡𝐞 𝐅𝐚𝐜𝐭: Entities are now explicitly permitted to limit their Category 15 disclosure to "financed emissions" only (defined strictly as emissions attributed to loans and investments).

• 𝐓𝐡𝐞 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧: This removes the mandatory requirement to calculate emissions for broader financial activities that don't fit standard methodologies, such as "facilitated emissions" or "insurance-associated emissions."

𝟐. 𝐄𝐱𝐜𝐥𝐮𝐬𝐢𝐨𝐧 𝐨𝐟 𝐃𝐞𝐫𝐢𝐯𝐚𝐭𝐢𝐯𝐞𝐬

• 𝐓𝐡𝐞 𝐅𝐚𝐜𝐭: The amendments allow entities to exclude GHG emissions associated with derivatives from their financed emissions calculations.

• 𝐓𝐡𝐞 𝐑𝐞𝐪𝐮𝐢𝐫𝐞𝐦𝐞𝐧𝐭: You must qualitatively explain what instruments you have classified as derivatives and describe the financial activities excluded. Note that the proposed requirement was removed in the final version to reduce burden.

𝟑. 𝐑𝐞𝐥𝐢𝐞𝐟 𝐟𝐫𝐨𝐦 𝐆𝐈𝐂𝐒 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐂𝐥𝐚𝐬𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧

• 𝐓𝐡𝐞 𝐅𝐚𝐜𝐭: Previously, IFRS S2 required commercial banks and insurers to disaggregate financed emissions using the Global Industry Classification Standard (GICS).

• 𝐓𝐡𝐞 𝐔𝐩𝐝𝐚𝐭𝐞: Entities can now use alternative industry classification systems that align better with their internal risk management processes or local jurisdictional requirements. You simply need to disclose which system you are using.

𝟒. 𝐄𝐱𝐩𝐚𝐧𝐝𝐞𝐝 𝐉𝐮𝐫𝐢𝐬𝐝𝐢𝐜𝐭𝐢𝐨𝐧𝐚𝐥 𝐑𝐞𝐥𝐢𝐞𝐟

• 𝐓𝐡𝐞 𝐅𝐚𝐜𝐭: If a local jurisdiction requires an entity to use a GHG measurement method other than the GHG Protocol, the amendments now allow the entity to apply that local method.

• 𝐓𝐡𝐞 𝐒𝐜𝐨𝐩𝐞: Crucially, this relief applies even if only part of the entity (e.g., a specific subsidiary) is subject to that local law, preventing the need for dual reporting.

These amendments are designed to reduce the "data friction" in reporting, allowing financial institutions to focus on the numbers that matter most, their actual financed emissions.

👉 𝐂𝐨𝐧𝐧𝐞𝐜𝐭 𝐰𝐢𝐭𝐡 C² (Csquare) 𝐭𝐨 𝐠𝐞𝐭 𝐬𝐭𝐚𝐫𝐭𝐞𝐝!

🌐 𝐜𝐬𝐪𝐮𝐚𝐫𝐞𝐜𝐚𝐫𝐛𝐨𝐧.𝐜𝐨𝐦

✉️ 𝐢𝐧𝐟𝐨@𝐜𝐬𝐪𝐮𝐚𝐫𝐞.𝐜𝐨.𝐢𝐧