ISSB Decided to Include Scope 3 in Disclosure
The International Sustainability Standards Board (ISSB for short) decided at its meeting in October this year to include Scope 3, the carbon emission measurement standard, in the scope of corporate disclosure, so as to provide investors with more detailed carbon emission information. At the meeting held in December this year, ISSB continued to adhere to this view and issued a document to guide the measurement of Scope 3.
Why is Scope3’s disclosure widely concerned? As the most widely covered indicator among the three measurement methods of carbon emissions, Scope 3 considers the carbon emissions of the upstream and downstream supply chains of enterprises, and the measurement method and difficulty are significantly higher than Scope 1 and Scope 2. At present, in the documents issued by global regulators, Scope 3 is still disclosed voluntarily. However, after ISSB clarified the disclosure of Scope 3, it is expected that in the next few years, the regulators will also be consistent with the statement of ISSB.
Scope 3 Disclosure will Have a Grace Period
Although Scope 3’s disclosure is an important progress in the field of ESG carbon emissions, from the current conditions, enterprises still need some time to learn and adapt to the latest disclosure requirements. Therefore, ISSB indicated that it would set a grace period of at least one year for Scope 3’s disclosure. At the same time, ISSB will also introduce some exemption clauses to provide practical disclosure standards for enterprises.
In addition, for the content disclosed by Scope 3, ISSB also said that it was acceptable for upstream and downstream companies in the supply chain to have some differences in carbon emission calculation. These discrepancies may be related to different reporting periods or measurement methods of different companies. However, the disclosure of Scope 3 has been formally written into the agenda.
References:
IFRS – ISSB announces guidance and reliefs to support Scope 3 GHG emission disclosures
