ISSB Trivia 5 — Questions and Answers
Question 1: Under IFRS S2, what greenhouse gas measurement protocol do companies use to measure GHG emissions?
- ISO 14064 exclusively
- GHG Protocol Corporate Standard (Correct answer)
- EPA Mandatory Reporting Rule
- UN Framework Convention GHG Inventory
Correct answer: GHG Protocol Corporate Standard
IFRS S2 requires entities to use the GHG Protocol Corporate Standard to measure their greenhouse gas emissions.
Question 2: What does IFRS S1 specify regarding the timing of sustainability disclosures relative to financial statements?
- Sustainability disclosures must be published 90 days before financial statements
- Sustainability disclosures must be published at the same time as financial statements (Correct answer)
- Sustainability disclosures may be published up to 60 days after financial statements
- No specific timing requirement is set
Correct answer: Sustainability disclosures must be published at the same time as financial statements
IFRS S1 requires that sustainability-related financial disclosures be published at the same time as the related financial statements.
Question 3: Which of the following is a physical climate risk category under IFRS S2?
- Carbon taxes and emission trading schemes
- Chronic risks such as rising sea levels and shifting precipitation patterns (Correct answer)
- Litigation risk from carbon emissions claims
- Stranded asset risk from low-carbon transition
Correct answer: Chronic risks such as rising sea levels and shifting precipitation patterns
IFRS S2 classifies physical climate risks as either acute (event-driven) or chronic (long-term shifts), with rising sea levels being a chronic physical risk.
Question 4: What is a 'transition risk' in the context of IFRS S2 climate disclosures?
- Risks from the physical impact of extreme weather events
- Risks from moving from a senior to a new management team
- Risks arising from the transition to a lower-carbon economy, such as policy changes (Correct answer)
- Risks from transitioning from GAAP to IFRS accounting standards
Correct answer: Risks arising from the transition to a lower-carbon economy, such as policy changes
Transition risks are risks arising from society's transition to a low-carbon economy, including policy, legal, technology, market, and reputational risks.
Question 5: How many SASB industry standards are available for use with IFRS S1?
- 11 industry standards
- 77 industry standards (Correct answer)
- 23 industry standards
- 143 industry standards
Correct answer: 77 industry standards
SASB developed 77 industry-specific standards across 11 sectors that companies can reference under IFRS S1.
Question 6: What is the significance of the ISSB's 'Integrated Reporting Framework' connection?
- The ISSB replaced the Integrated Reporting Framework entirely
- The Value Reporting Foundation, which held the IR Framework, merged into the ISSB (Correct answer)
- The ISSB requires all companies to publish integrated reports
- The IR Framework was rejected by the ISSB as incompatible
Correct answer: The Value Reporting Foundation, which held the IR Framework, merged into the ISSB
The Value Reporting Foundation, which administered both the IR Framework and SASB Standards, consolidated into the ISSB in 2022.
Question 7: What concept does IFRS S1 use to define what sustainability information must be disclosed?
- Proportionality — smaller companies disclose less
- Materiality — information that could influence investor decisions (Correct answer)
- Completeness — all sustainability topics must be covered
- Prescriptiveness — a fixed checklist of required metrics
Correct answer: Materiality — information that could influence investor decisions
IFRS S1 uses the materiality concept, requiring disclosure of sustainability information that could reasonably be expected to influence investor decisions.
ISSB Trivia 5
Under IFRS S2, what greenhouse gas measurement protocol do companies use to measure GHG emissions?