IFRS Sustainability Taxonomy
The International Sustainability Standards Board (ISSB) plans to update the IFRS sustainability taxonomy to reflect the changes to climate related disclosures in IFRS S2 by December 2025.
The ISSB plan reflects the disclosure requirements for Scope 3, Category 15 greenhouse gas emissions in the taxonomy, while considering the application of industry taxonomies in the classification of financing emissions.
Related Post: ISSB Releases IFRS Sustainability Disclosure Taxonomy
IFRS Sustainability Taxonomy Update
ISSB believes that this update can help the market more efficiently obtain and compare information on companies’ climate information disclosure, especially in the complex area of Scope 3 financing emissions. This update mainly includes the following aspects:
Scope 3 Disclosure Requirements for Category 15 Emissions
ISSB plans to add a text element that allows companies to align the disclosure of Scope 3 Category 15 emissions with financing emissions. Companies need to explain the definition of derivatives and exclude related financial activities. The IFRS sustainability taxonomy already includes Scope 3 greenhouse gas emission information, and this revision will add a sub item for Category 15 emissions to facilitate companies’ disclosure of financing emissions.
Industry Classification
The IFRS sustainability taxonomy previously used the Global Industry Classification Standard (GICS) as the category standard. This revision will allow companies to choose the industry taxonomy in IFRS S2, helping users of sustainable disclosure information understand the climate transition risks faced by companies.
Exemption from Modifications
This update does not involve alternative methods for greenhouse gas accounting and Global Warming Potential (GWP), as these disclosures can already be reflected through the elements in the taxonomy. When enterprises adopt the above alternative methods, they need to disclose the measurement method and reasons for choosing this method.
The updated IFRS sustainability taxonomy will be applicable from January 1, 2027. ISSB plans to invite stakeholders to provide feedback on this update and adjust based on this feedback by the end of September 2026.
Reference:
ISSB Proposes Updates to Its Digital Sustainability Taxonomy
