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

IFRS S2 requires climate-related disclosures useful to primary users of general purpose financial reports in making decisions about the entity.

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

IFRS S2 distinguishes between physical risks (acute and chronic) and transition risks arising from the shift to a lower-carbon economy.

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

IFRS S2 requires use of the GHG Protocol Corporate Standard to measure and disclose Scope 1, 2, and 3 GHG emissions.

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

IFRS S2 grants a one-year transition relief allowing entities to omit Scope 3 GHG emissions disclosures in the first reporting period.

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

IFRS S2 requires transparency about carbon credit use, including whether credits represent removals or reductions and third-party verification status.

ISSB - International Sustainability Standards Board Practice Test

ISSB - International Sustainability Standards Board Practice Test

ISSB IFRS S2 Climate-Related Disclosures