ISSB IFRS S2 Climate-Related Disclosures 3

Question 1

Under IFRS S2, what is the definition of 'climate-related opportunities'?

Accepted Answer

Potential positive effects on the entity arising from climate change or efforts to address it, such as new markets or products

Answer

Climate-related opportunities include resource efficiency gains, new products, market access, and competitive advantages arising from the transition to a lower-carbon economy.

Question 2

How does IFRS S2 require disclosure of climate-related risks and opportunities affecting the entity's value chain?

Accepted Answer

Entities must disclose material climate risks and opportunities across their upstream and downstream value chain, not just direct operations

Answer

IFRS S2 requires consideration of the entire value chain because many climate risks arise in upstream supply chains or downstream product use.

Question 3

Under IFRS S2, what quantitative or qualitative information must entities provide about climate-related risks' financial effects?

Accepted Answer

Current and anticipated financial effects on financial position, financial performance, and cash flows

Answer

IFRS S2 requires disclosure of both current and anticipated financial effects, with quantification where possible and qualitative explanation where quantification is not practicable.

Question 4

Which governance disclosure does IFRS S2 require specifically for climate oversight?

Accepted Answer

Information about board-level oversight of climate risks and management's role in assessing and managing climate risks

Answer

IFRS S2 requires disclosure of how the board oversees climate risks and the role of management in assessing and managing those risks.

Question 5

Under IFRS S2, what additional disclosure is required for entities with climate-related targets involving Scope 3 emissions?

Accepted Answer

The entity must disclose the underlying methodology, data sources, and key assumptions used to measure Scope 3 emissions

Answer

Given Scope 3 complexity, IFRS S2 requires entities with Scope 3 targets to be especially transparent about measurement methodology, data sources, and assumptions.

ISSB - International Sustainability Standards Board Practice Test

ISSB - International Sustainability Standards Board Practice Test

ISSB IFRS S2 Climate-Related Disclosures 3