ISSB IFRS S2 Climate-Related Disclosures

Question 1

What is the primary objective of IFRS S2 Climate-related Disclosures?

Accepted Answer

To require entities to disclose information about climate-related risks and opportunities that is useful to investors

Answer

To mandate net-zero commitments from all publicly listed companies

Answer

To set emission reduction targets for entities by industry sector

Answer

To replace national climate reporting regulations with a single global standard

Question 2

Under IFRS S2, what are the two categories of climate-related risks that entities must address?

Accepted Answer

Physical risks and transition risks

Answer

Regulatory risks and reputational risks

Answer

Short-term and long-term risks

Answer

Domestic and international risks

Question 3

Which greenhouse gas protocol does IFRS S2 require entities to use for measuring GHG emissions?

Accepted Answer

The Greenhouse Gas Protocol Corporate Standard

Answer

ISO 14064 exclusively

Answer

The EPA Mandatory Reporting Rule methodology

Answer

Any nationally recognized GHG quantification standard

Question 4

Under IFRS S2, which Scope of GHG emissions is subject to a transition relief provision on first adoption?

Accepted Answer

Scope 3 emissions — entities may omit Scope 3 in the first year of applying IFRS S2

Answer

Scope 1 emissions — stationary combustion may be deferred

Answer

Scope 2 emissions — market-based accounting may be deferred

Answer

All Scopes — full deferral is permitted for one year

Question 5

What does IFRS S2 require entities to disclose about their use of carbon credits?

Accepted Answer

Whether and how the entity uses carbon credits, the type, and how they contribute to climate-related targets

Answer

Only the total monetary value of carbon credits purchased

Answer

Carbon credit disclosures are optional under IFRS S2

Answer

Only carbon credits from UN-certified offsetting programs need disclosure

Question 6

Under IFRS S2, what cross-industry metric must all entities disclose regardless of sector?

Accepted Answer

Absolute gross Scope 1, 2, and 3 GHG emissions expressed in metric tonnes of CO2 equivalent

Answer

Total energy consumption in megawatt-hours

Answer

Percentage of revenue from green products and services

Answer

Number of employees in climate-related roles