ISSB Metrics and Targets 3

Question 1

Under IFRS S2, which category of Scope 3 emissions covers goods and services purchased by the reporting entity from its suppliers?

Accepted Answer

Category 1: Purchased goods and services

Answer

Category 1 of Scope 3 under the GHG Protocol (referenced in IFRS S2) covers upstream emissions from the production of goods and services purchased or acquired by the reporting entity.

Question 2

What does IFRS S2 require entities to disclose regarding their internal carbon price, if one is used?

Accepted Answer

The price per metric tonne of CO2e and how it is applied in decision-making

Answer

IFRS S2 requires entities that use an internal carbon price to disclose the price per tonne CO2e and a description of how it is applied in decision-making processes.

Question 3

Which of the following best describes a 'net zero' target in the context of ISSB climate disclosures?

Accepted Answer

Reducing GHG emissions as far as possible and neutralizing any residual emissions through removal

Answer

A net zero target requires deep cuts to all GHG emissions and then balancing remaining residual emissions with equivalent carbon removals, not merely offsetting current levels.

Question 4

Under IFRS S2, if an entity changes its GHG emissions measurement methodology between reporting periods, what is required?

Accepted Answer

Restate prior-period comparative GHG emissions to reflect the new methodology

Answer

IFRS S2 requires entities to restate prior-period comparative GHG data when the measurement methodology changes, ensuring comparability across reporting periods.

Question 5

What is the purpose of disclosing 'remuneration linked to climate targets' under IFRS S2?

Accepted Answer

To show whether executive pay is tied to achieving climate-related metrics, indicating governance accountability

Answer

Disclosing remuneration linked to climate targets reveals whether management incentives are aligned with climate goals, providing evidence of governance accountability for climate performance.

ISSB - International Sustainability Standards Board Practice Test

ISSB - International Sustainability Standards Board Practice Test

ISSB Metrics and Targets 3