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Industry-based Guidance on implementing

Climate-related Disclosures

June 2023

IFRS S2

IFRS

® Sustainability Disclosure Standard

International Sustainability Standards Board

Industry-based Guidance

on implementing

Climate-related Disclosures

This Industry-based Guidance accompanies IFRS S2 Climate related Disclosures (published June 2023; see

separate booklet) and is issued by the International Sustainability Standards Board (ISSB).

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CONTENTS

from page

INUSTRY-BASED GUIDANCE ON IMPLEMENTING

IFRS S2 CLIMATE-RELATED DISCLOSURES

CONSUMER GOODS SECTOR

EXTRACTIVES & MINERALS PROCESSING SECTOR

FINANCIALS SECTOR

117

FOOD & BEVERAGE SECTOR

148

HEALTH CARE SECTOR

225

INFRASTRUCTURE SECTOR

242

RENEWABLE RESOURCES & ALTERNATIVE ENERGY SECTOR

351

RESOURCE TRANSFORMATION SECTOR

403

SERVICES SECTOR

444

TECHNOLOGY & COMMUNICATIONS SECTOR

455

TRANSPORTATION SECTOR

493

Introduction

This volume is part of the Industry-based Guidance on Implementing IFRS S2 Climate-related

Disclosures. This guidance suggests possible ways to apply some of the disclosure requirements in

IFRS S2 but does not create additional requirements.

This volume suggests possible ways to identify, measure and disclose information about

climate-related risks and opportunities that are associated with particular business

models, economic activities and other common features that characterise participation in

this industry.

This industry-based guidance has been derived from Sustainability Accounting Standards

Board (SASB) Standards, which are maintained by the International Sustainability

Standards Board (ISSB). The metric codes used in SASB Standards have been included for

ease of reference. For additional context regarding the industry-based guidance contained

in this volume, including structure and terminology, application and illustrative

examples, refer to Section III of the Accompanying Guidance to IFRS S2.

Volume 1—Apparel, Accessories & Footwear

Industry Description

The Apparel, Accessories & Footwear industry includes entities involved in the design,

manufacturing, wholesaling and retailing of various products, including adult and

children’s clothing, handbags, jewellery, watches and footwear. Products are

manufactured primarily by vendors in emerging markets, thereby allowing entities in

the industry to focus on design, wholesaling, marketing, supply chain management and

retail activities.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Raw Materials

Sourcing

(1) List of priority raw materials; for each

priority raw material: (2) environmental

or social factor(s) most likely to threaten

sourcing, (3) discussion on business

risks or opportunities associated with

environmental or social factors and

(4) management strategy for addressing

business risks and opportunities

Discussion

and Analysis

n/a

CG-AA-440a.3

(1) Amount of priority raw materials

purchased, by material, and (2) amount

of each priority raw material that is

certified to a third-party environmental

or social standard, by standard

Quantitative

Metric tons (t)

CG-AA-440a.4

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Number of (1) Tier 1 suppliers and (2) suppliers beyond

Tier 1 1

Quantitative

Number

CG-AA-000.A

Raw Materials Sourcing

Topic Summary

The Apparel, Accessories & Footwear industry relies on many raw materials including

cotton, leather, wool, rubber, and precious minerals and metals, as inputs for finished

products. Sustainability impacts related to climate change, land use, resource scarcity

and conflict in regions where the industry’s supply chain operates affect the industry’s

ability to reliably source materials. The ability of entities to manage potential material

Note to CG-AA-000.A – Tier 1 suppliers are defined as suppliers that transact directly with the

entity, such as finished goods manufacturers (for example cut and sew facilities). Suppliers

beyond Tier 1 are the key suppliers to the entity’s Tier 1 suppliers and can include

manufacturers, processing plants, and providers of raw materials extraction (for example mills,

dye houses and washing facilities, sundry manufacturers, tanneries, embroiderers, screen

printers, farms, and/or slaughter houses). The entity shall disclose whether any supplier data

beyond Tier 1 is based on assumptions, estimates, or otherwise includes any uncertainty.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

shortages, supply disruptions, price volatility and reputational risks can be more difficult

when supply chains lack transparency. Failure to effectively manage this issue can delay

shipments and depress earnings, reduce margins, constrain revenue growth or increase

costs of capital. The types of risk associated with sourcing materials can require varying

solutions, including engaging with suppliers, enhancing transparency by using

certification standards, using innovative alternative materials, or introducing circular

economy practices. Entities that are proactive may reduce their exposure to price

volatility and potential supply disruptions, while improving their brand reputation and

developing new market opportunities.

Metrics

CG-AA-440a.3. (1) List of priority raw materials; for each priority raw material:

(2) environmental or social factor(s) most likely to threaten sourcing,

(3) discussion on business risks or opportunities associated with environmental or

social factors and (4) management strategy for addressing business risks and

opportunities

The entity shall disclose its priority raw materials purchased for finished goods.

1.1

The entity shall identify priority raw materials using the definition of

‘priority materials’ outlined in the Priority Material section of the Textile

Exchange’s Materials Terminology Guide.

1.2

Priority raw materials may include synthetic fibres, natural fibres,

manufactured cellulosic materials, materials derived from animals and

any other materials used directly to make apparel, accessories or footwear

products, which may include cotton, rayon, viscose, polyester, acrylic,

spandex, nylon, rubber, foam, leather, wool, cashmere, mohair, flax, silk,

hemp and down.

1.3

The entity shall identify priority raw materials using the categorisation

scheme presented in the Materials Portfolio section of the Textile

Exchange’s Materials Terminology Guide.

1.4

The scope of disclosure shall include priority raw materials present in

finished goods and shall exclude raw materials used in packaging and

manufacturing.

1.5

Priority raw materials include materials purchased by the entity or its

suppliers for the purposes of producing the entity’s finished goods.

1.6

If the entity is vertically integrated across the value chain and does not

purchase its priority raw materials from a third-party supplier, it shall

identify the priority raw materials sourced from its owned operations and

used in the production of its finished goods.

For each priority raw material, the entity shall identify the important

environmental or social factors most likely to threaten its ability to source or

purchase each material.

2.1

Environmental factors may include:

2.1.1

Climate change impacts (for example, extreme weather events or

water stress)

IFRS S2 INDUSTRY-BASED GUIDANCE

2.1.2

Regulation on greenhouse gases (GHG)

2.1.3

Environmental regulations for suppliers

2.1.4

Land use practices

2.1.5

Production

methods

that

result

water

pollution,

soil

degradation, deforestation or loss of biodiversity

2.2

Social factors may include:

2.2.1

Suppliers’ animal welfare, labour and human rights practices

2.2.2

Materials sourcing from regions of conflict

2.2.3

Regulations on labour practices or human rights

For each priority raw material, the entity shall discuss the business risks and

opportunities associated with environmental or social factors.

3.1

Business risks and opportunities may include:

3.1.1

Access to, and availability of, the priority raw material

3.1.2

Ability to trace the priority raw material

3.1.3

Price volatility of the priority raw material

3.1.4

Regulatory compliance issues associated with the priority raw

material

3.1.5

Customer demand for products containing the priority raw

material

3.1.6

The entity’s brand value and reputation

For each priority raw material, the entity shall discuss its management strategy

for addressing business risks and opportunities associated with environmental or

social factors most likely to threaten its ability to source priority raw materials.

4.1

Relevant strategies may include:

4.1.1

Enhancing supply chain monitoring and traceability of raw

materials suppliers through due diligence practices, research into

traceability or the use of traceability systems, technology, supplier

screening, supplier audits or certifications, or a list of countries

from which the entity sources each priority raw material

4.1.2

Supporting raw material suppliers through supplier training or

engagement programmes or introducing regenerative agricultural

practices

4.1.3

Partnering

with

industry

groups

non-governmental

organisations to address environmental or social factors in supplier

regions

4.1.4

Investing in the design phase or in research and development to

identify substitutable or alternative materials less impacted by

environmental and social factors

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

4.2

If the entity identifies cotton as one of its priority raw materials, it shall

discuss its vulnerability to cotton-growing regions with water stress and

how it manages the risk of price variability because of sourcing cotton

from these regions.

4.2.1

The entity may identify its known sources of cotton for High

(40%–80%) or Extremely High (>80%) Baseline Water Stress using

the World Resources Institute’s (WRI) Water Risk Atlas tool,

Aqueduct.

4.3

The entity shall disclose any relevant performance measures or targets

used to assess the effectiveness of its management approach, as well as its

progress against such targets.

4.4

Disclosure corresponds to the Sustainable Apparel Coalition’s Higg Brand

& Retail Module.

The entity may use the following table format to organise disclosure.

Priority Raw Material

(Name)

Environmental or

Social Factors

Discussion of

Business Risks or

Opportunities

Management Strategy

CG-AA-440a.4. (1) Amount of priority raw materials purchased, by material, and

(2) amount of each priority raw material that is certified to a third-party

environmental or social standard, by standard

For each priority raw material, the entity shall disclose the amount of materials

purchased, in metric tons, during the reporting period.

1.1

The entity shall identify priority raw materials using the definition of

‘priority materials’ outlined in the Priority Material section of the Textile

Exchange’s Materials Terminology Guide.

1.2

Priority raw materials may include synthetic fibres, natural fibres,

manufactured cellulosic materials, materials derived from animals, and

any other materials used directly to make apparel, accessories, or footwear

products, which may include cotton, rayon, viscose, polyester, acrylic,

spandex, nylon, rubber, foam, leather, wool, cashmere, mohair, flax, silk,

hemp and down.

1.3

The entity shall identify priority raw materials using the categorisation

scheme presented in the ‘Materials Portfolio’ section of the Textile

Exchange’s Materials Terminology Guide.

1.4

If the entity purchases finished goods rather than unprocessed raw

materials, it shall calculate the initial amount, in metric tons, of priority

raw materials required for production.

IFRS S2 INDUSTRY-BASED GUIDANCE

1.4.1

The entity shall account for material loss and wastage throughout

production and should reference the Textile Exchange’s Fibre Uptake

Calculations & Reporting Best Practices Guide and Fibre Conversion

Methodology.

1.5

If the entity does not measure the weight of a material, it shall provide an

alternative measurement, such as surface area.

1.6

The purchased amount of each priority raw material shall reflect the

material in its original state and should not be presented with further data

manipulation, such as reporting it as ‘dry weight’ consistent with guidance

for Global Reporting Initiative (GRI) Disclosure 301-1 Materials used by weight

or volume.

1.7

If estimation is required, the entity shall disclose the methods used.

1.8

The scope of disclosure shall include priority raw materials present in

finished goods and exclude raw materials used in packaging and

manufacturing.

1.9

Priority raw materials include materials purchased by the entity or its

suppliers for the purposes of producing the entity’s finished goods.

1.10

If the entity is vertically integrated across the value chain and does not

purchase its priority raw materials from a third-party supplier, it shall

identify the priority raw materials sourced from its owned operations and

used in the production of its finished goods.

For each priority raw material, the entity shall disclose the amount, in metric

tons, purchased that is certified to a third-party environmental or social standard,

by standard.

2.1

Third-party environmental or social standards are defined as standards

developed by a third party and address environmental or social factors

likely to threaten an entity’s ability to reliably source its priority raw

materials.

2.2

Third-party environmental and social standards may include:

2.2.1

Textile Exchange’s Recycled Claim Standard (RCS), Global Recycled

Standard (GRS), Organic Content Standard (OCS), Responsible Down

Standard (RDS), Responsible Wool Standard (RWS) and Responsible

Mohair Standard (RMS)

2.2.2

Global Organic Textile Standard (GOTS)

2.2.3

Cotton Made in Africa (CmiA)

2.2.4

Fair Trade Certified

2.2.5

Organic Fair Trade

2.2.6

Leather Working Group (LWG)

2.2.7

Forest Stewardship Council (FSC) Certification

2.2.8

Programme for the Endorsement of Forest Certification (PEFC)

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

2.2.9

Better Cotton Initiative (BCI)

2.3

The scope of certified priority raw materials includes materials derived

from a process certified to a third-party environmental or social standard.

2.4

The entity may disclose priority raw materials not certified to a third-party

environmental or social standard, but that contribute to the entity’s

strategy to secure reliable sourcing.

2.4.1

Materials may include reclaimed cotton and wool, mechanically or

chemically recycled natural, synthetic or semi-synthetic fibres.

2.4.2

Materials may include those certified to a standard/certification

developed by the entity.

For each priority raw material, the entity shall discuss:

3.1

Why it has chosen the specified third-party certification(s)/standard(s)

3.2

How the certified materials contribute to managing the entity’s business

risks and opportunities

3.3

Any quantitative targets it has set for certified priority raw materials

The entity may use the following table format to organise disclosure.

Priority Raw Material

(Name)

Amount Purchased

(Metric Tons)

Amount Certified, By Standard

Certification/

Standard & Associat-

ed Discussion

(Technical Protocol

#3 - 3.3)

Amount Certified

IFRS S2 INDUSTRY-BASED GUIDANCE

Volume 2—Appliance Manufacturing

Industry Description

Appliance Manufacturing industry entities design and manufacture household appliances

and hand tools. Entities in this industry sell and manufacture products all over the

world, primarily selling products to consumers through retailers.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Product

Lifecycle

Environmental

Impacts

Percentage of eligible products by

revenue certified to an energy efficiency

certification

Quantitative

Percentage

(%) by

revenue

CG-AM-410a.1

Percentage of eligible products by

revenue certified to an environmental

product lifecycle standard

Quantitative

Percentage

(%) by

revenue

CG-AM-410a.2

Description of efforts to manage

products’ end-of-life impacts

Discussion

and Analysis

n/a

CG-AM-410a.3

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Annual production 2

Quantitative

Number of

units

CG-AM-000.A

Product Lifecycle Environmental Impacts

Topic Summary

Entities in the Appliance Manufacturing industry seek to differentiate their products

from those of competitors. One important differentiating factor is the lifecycle

environmental impact of products and an entity’s ability to design products with the

entire lifecycle in mind, from creation and use to disposal. This includes appliance energy

and water efficiency, which account for a significant proportion of a home’s energy and

water use, as well as designing for and facilitating safe end-of-life disposal and recycling.

Entities designing and manufacturing products to decrease lifecycle environmental

impacts are more likely to increase market share owing to a lower cost of ownership, and

they may better manage increased regulation related to issues such as extended producer

responsibility.

Note to CG-AM-000.A – Production shall be disclosed as the number of units produced by

product category, where relevant product categories may include small appliances and major

appliances.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Metrics

CG-AM-410a.1. Percentage of eligible products by revenue certified to an energy

efficiency certification

The entity shall disclose the percentage of its revenue from eligible products

certified to an energy efficiency certification.

1.1

The entity shall calculate the percentage as the revenue from products

meeting the requirements for the applicable certification divided by total

revenue from products eligible for certification by each certification.

1.1.1

Eligible products are those in a product category for which

certification exists, such as: heating and cooling product categories

such

air

purifiers,

clothes

dryers,

clothes

washers,

dehumidifiers,

dishwashers,

freezers,

refrigerators,

air

conditioners, boilers, ductless heating and cooling, furnaces, heat

pumps and ventilation fans.

The scope of disclosure includes products that meet the requirements of the most

current version of the applicable certification requirements.

2.1

If the entity has products certified to a previous version of certification

requirements, it shall disclose this information, including to which version

its products are certified, a breakdown of how many products are certified

to that version and the time line(s) for achieving certification to the most

current requirements version.

For each jurisdiction where the entity sells products, the entity shall disclose the

applicable certification programme.

CG-AM-410a.2. Percentage of eligible products by revenue certified to an

environmental product lifecycle standard

The entity shall disclose the percentage of its revenue from eligible products

certified to a third-party environmental product lifecycle standard.

1.1

Environmental product lifecycle standard is defined as a certification

programme

standard

focused

product

design

and

materials,

manufacturing processes, product performance during use-phase, and

product end-of-life.

1.2

The entity shall calculate the percentage as the revenue from products

meeting the requirements for the applicable certification divided by total

revenue from products eligible for certification by each certification.

1.2.1

Eligible products are those in a product category for which

certification exists, including: refrigeration appliances, washers,

dryers, cooking appliances, air conditioners, microwave oven

appliances, dehumidifier appliances and floor care appliances.

The scope of disclosure includes products that meet the requirements of the most

current version of the applicable certification requirements.

IFRS S2 INDUSTRY-BASED GUIDANCE

2.1

If the entity has products certified to a previous version of certification

requirements, it shall disclose this information, including to which version

its products are certified, a breakdown of how many products are certified

to that version, and its time line(s) for achieving certification to the most

current requirements version.

For each jurisdiction where the entity sells products, the entity shall disclose the

applicable certification programme or disclose the applicable international

certification programme.

CG-AM-410a.3. Description of efforts to manage products’ end-of-life impacts

The entity shall describe its efforts to manage the end-of-life impacts of its

products, including those related to safe and proper disposal or recycling of

constituent chemicals and other product components, which may include toxic

heavy metals (for example, mercury and cadmium), rigid polymers, refrigerants

and other metals (for example, steel and aluminium).

The entity shall describe the scope of its efforts, including to which product

categories, business segments or operating regions they relate.

The entity shall discuss how it includes end-of-life considerations in product

design such as:

3.1

Use of materials that are easily and commonly recyclable in existing

recycling infrastructure

3.2

Eliminating or minimising the use of hazardous materials or materials

that may otherwise pose environmental harm upon disposal (for example,

refrigerants with ozone depleting potential or global warming potential)

3.3

Designing products for disassembly (i.e., designing products so they can be

easily, rapidly, and cost-effectively disassembled with commonly available

tools)

3.4

Proper labelling of products and their component materials to facilitate

disassembly and recycling

The entity shall discuss its participation in extended producer responsibility (EPR)

initiatives, including:

4.1

Whether the entity directly conducts product take-back, recovery and

recycling or if the entity supports infrastructure for product recovery and

recycling through joint ventures, partnerships with retailers and others, or

by funding research into recycling technologies

4.2

Whether the initiative is voluntary or mandatory

4.3

Relevant performance measures or targets for the initiative such as the

total amount of material recovered and the total amount of material

recycled

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Volume 3—Building Products & Furnishings

Industry Description

Entities in the Building Products & Furnishings industry design and manufacture home

improvement products, home and office furnishings, and structural wood building

materials. The industry’s products include flooring, ceiling tiles, home and office

furniture and fixtures, wood trusses, plywood, panelling and lumber. Entities typically

sell their products through distribution channels to retail stores or through independent

or entity-owned dealerships.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Energy

Management

Manufacturing

(1) Total energy consumed,

(2) percentage grid electricity and

(3) percentage renewable

Quantitative

Gigajoules

(GJ),

Percentage

(%)

CG-BF-130a.1

Product

Lifecycle

Environmental

Impacts

Description of efforts to manage product

lifecycle impacts and meet demand for

sustainable products

Discussion

and Analysis

n/a

CG-BF-410a.1

(1) Weight of end-of-life material

recovered, (2) percentage of recovered

materials recycled

Quantitative

Metric tons (t),

Percentage

(%) by weight

CG-BF-410a.2

Wood Supply

Chain

Management

(1) Total weight of wood fibre materials

purchased, (2) percentage from third-

party certified forestlands,

(3) percentage by standard and

(4) percentage certified to other wood

fibre standards, (5) percentage by

standard 3

Quantitative

Metric tons (t),

Percentage

(%) by weight

CG-BF-430a.1

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Annual production 4

Quantitative

See note

CG-BF-000.A

Area of manufacturing facilities 5

Quantitative

Square

metres (m²)

CG-BF-000.B

Note to CG-BF-430a.1 – The entity shall describe its practices for sourcing: (1) wood fibre

materials from forestlands that are not certified to a third-party forest management standard,

and (2) wood fibre materials not certified to other wood fibre certification standards.

Note to CG-BF-000.A – Production shall be disclosed in typical units tracked by the entity such

as number of units, weight, and/or square feet.

Note to CG-BF-000.B – The scope shall be limited to total area under roof, including

manufacturing and administrative functions.

IFRS S2 INDUSTRY-BASED GUIDANCE

Energy Management in Manufacturing

Topic Summary

The Building Products & Furnishings industry creates value through energy-intensive

manufacturing processes. Purchased electricity represents the largest share of energy

consumption across the industry, while entities also may use fossil fuel energy on-site.

The price of conventional grid electricity and volatility of fossil fuel prices may increase

because of evolving climate change regulations and new incentives for energy efficiency

and renewable energy, among other factors, while alternative energy sources become

more cost-competitive. Decisions regarding energy sourcing and type, as well as the use

of alternative energy, can create trade-offs related to the energy supply’s cost and

reliability for operations. Since the industry operates on relatively narrow profit margins,

reductions in energy consumption may have a significant influence on financial

performance. The way an entity manages energy efficiency, its reliance on different types

of energy and their associated sustainability risks, and access alternative energy sources

are likely to impact financial performance.

Metrics

CG-BF-130a.1. (1) Total energy consumed, (2) percentage grid electricity and

(3) percentage renewable

The entity shall disclose (1) the total amount of energy it consumed as an

aggregate figure, in gigajoules (GJ).

1.1

The scope of energy consumption includes energy from all sources,

including energy purchased from external sources and energy produced by

the entity itself (self-generated). For example, direct fuel usage, purchased

electricity, and heating, cooling and steam energy are all included within

the scope of energy consumption.

1.2

The scope of energy consumption includes only energy directly consumed

by the entity during the reporting period.

1.3

In calculating energy consumption from fuels and biofuels, the entity shall

use higher heating values (HHV), also known as gross calorific values

(GCV), which are measured directly or taken from the Intergovernmental

Panel on Climate Change (IPCC).

The entity shall disclose (2) the percentage of energy it consumed that was

supplied from grid electricity.

2.1

The percentage shall be calculated as purchased grid electricity

consumption divided by total energy consumption.

The entity shall disclose (3) the percentage of energy it consumed that was

renewable energy.

3.1

Renewable energy is defined as energy from sources that are replenished

at a rate greater than or equal to their rate of depletion, such as

geothermal, wind, solar, hydro and biomass.

3.2

The percentage shall be calculated as renewable energy consumption

divided by total energy consumption.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

3.3

The scope of renewable energy includes renewable fuel the entity

consumed, renewable energy the entity directly produced and renewable

energy the entity purchased, if purchased through a renewable power

purchase agreement (PPA) that explicitly includes renewable energy

certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy

Certified utility or supplier programme, or other green power products

that explicitly include RECs or GOs, or for which Green‐e Energy Certified

RECs are paired with grid electricity.

3.3.1

For any renewable electricity generated on-site, any RECs and GOs

shall be retained (not sold) and retired or cancelled on behalf of the

entity for the entity to claim them as renewable energy.

3.3.2

For renewable PPAs and green power products, the agreement shall

explicitly include and convey that RECs and GOs be retained or

replaced and retired or cancelled on behalf of the entity for the

entity to claim them as renewable energy.

3.3.3

The renewable portion of the electricity grid mix that is outside of

the control or influence of the entity is excluded from the scope of

renewable energy.

3.4

For the purposes of this disclosure, the scope of renewable energy from

biomass sources is limited to materials certified to a third-party standard

(for example, Forest Stewardship Council, Sustainable Forest Initiative,

Programme for the Endorsement of Forest Certification or American Tree

Farm System), materials considered eligible sources of supply according to

the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or

Green-e regional standards, or materials eligible for an applicable

jurisdictional renewable portfolio standard.

The entity shall apply conversion factors consistently for all data reported under

this disclosure, such as the use of HHVs for fuel usage (including biofuels) and

conversion of kilowatt hours (kWh) to GJ (for energy data including electricity

from solar or wind energy).

Product Lifecycle Environmental Impacts

Topic Summary

Depending on the specific building product or furnishing, significant environmental

impacts can arise during raw material sourcing, transportation, manufacturing, use-

phase or end-of-life. Increasing consumer and regulatory preference for less impactful

products has spawned the development of more sustainable products, broadly termed

‘green building materials’. In addition, product lifecycle certification has arisen as a tool

for entities and their customers to assess and improve a product’s lifecycle impact.

Certification programmes typically examine specific sustainability characteristics of a

product category and include the use of closed-loop materials that minimise a product’s

end-of-life environmental impacts and reduce the need for extracting or producing virgin

materials. Through product innovation and design that facilitates end-of-life product

recovery and the use of less impactful materials, the adoption of product certification

programmes, and partnerships with customers, manufacturers of building products can

IFRS S2 INDUSTRY-BASED GUIDANCE

improve lifecycle impacts, reduce regulatory risk, meet growing customer demand and

realise cost savings.

Metrics

CG-BF-410a.1. Description of efforts to manage product lifecycle impacts and

meet demand for sustainable products

The entity shall discuss strategies to assess and manage the environmental impact

of products throughout their lifecycle.

1.1

Relevant strategies and efforts to assess product lifecycle impacts include

the use of environmentally focused design principles, and the use of

sustainability performance standards, screening tools and sampling

methods, among others, including the operational processes used for these

assessments.

1.2

Relevant strategies and efforts to manage product lifecycle impacts include

changes in materials selection, assessment of upstream environmental

impacts, changes in manufacturing (resource intensity), recycled and

renewable

materials

use,

optimisation

packaging,

design

for

consolidated shipping, design of low-energy-consumption products, design

for product take-back and labelling for recycling, among others.

The entity shall discuss factors that drive demand for its sustainable building and

furnishings products, including green building certification programmes,

jurisdictional procurement criteria, demand from retailers or retail consumer

demand.

The entity shall describe the scope of its efforts including to which product

categories, business segments or operating regions they relate.

The entity may discuss its use of Life Cycle Assessment (LCA) and Environmental

Product Declarations (EPD) in the context of its approach to reducing

environmental impact and maximising product resource efficiency.

4.1

Improvements to the environmental efficiency of products should be

discussed in terms of LCA functional unit service parameters (time, extent

and quality of function).

4.2

LCA should be based on ISO 14040 and ISO 14044. EPD should be based on

ISO 14025 and ISO 21930:2017 for construction products.

The entity may disclose the percentage of its products certified to third-party

multi-attribute or single-attribute sustainability standards.

The entity may describe its extended producer responsibility (EPR) efforts,

including:

6.1

How end-of-life considerations are incorporated into product design,

including using materials that are easily and commonly recyclable in

existing recycling infrastructure

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

6.2

Designing products for disassembly (designing products so they can be

easily, rapidly and cost-effectively disassembled with commonly available

tools)

6.3

Proper labelling of products and their component materials to facilitate

disassembly and recycling.

CG-BF-410a.2. (1) Weight of end-of-life material recovered, (2) percentage of

recovered materials recycled

The entity shall disclose the weight, in metric tons, of materials recovered,

including those recovered through recycling services, product take-back

programmes and refurbishment services.

1.1

The scope of disclosure shall include products, materials and parts at the

end of their useful life that would have otherwise been discarded as waste

or used for energy recovery, but have instead been collected.

1.2

The scope of disclosure shall include both materials physically handled by

the entity and materials of which the entity does not take physical

possession, but for which it has contracted with a third party the task of

collection for the express purpose of reuse, recycling or refurbishment.

1.3

The scope of disclosure excludes products and parts that are under

warranty and have been collected for repairs.

The entity shall disclose the percentage of end-of-life materials recovered that

were recycled or remanufactured.

2.1

Recycled and remanufactured materials are defined as waste materials

reprocessed or treated by means of production or manufacturing processes

and made into a final product or a component for incorporation into a

product.

2.2

The scope of recycled materials includes materials used, reused or

reclaimed.

2.2.1

Reused materials are defined as those recovered products or

components of products used for the same purpose for which they

were conceived.

2.2.2

Reclaimed materials are defined as those processed to recover or

regenerate a usable product.

2.3

The scope of recycled materials includes materials sent for further

recycling through the transfer to a third party for the express purpose of

reuse, recycling or refurbishment.

2.4

The scope of recycled and remanufactured products includes primary

recycled materials, co-products (outputs of equal value to primary recycled

materials), and by-products (outputs of lesser value than primary recycled

materials).

2.5

The entity shall calculate the percentage as the weight of incoming

recovered material recycled or remanufactured divided by the total weight

of incoming recovered material.

IFRS S2 INDUSTRY-BASED GUIDANCE

2.6

Portions of products and materials discarded in landfills are not

considered recycled. Only the portions of products directly incorporated

into new products, co-products or by-products shall be included in the

percentage recycled.

2.7

Materials incinerated, including for energy recovery, are not considered

reused, recycled or reclaimed.

2.7.1

Energy recovery is defined as the use of combustible waste to

generate energy through direct incineration, with or without other

waste, but with recovery of the heat.

The entity may disclose:

3.1

Whether it directly conducts product take-back, recovery and recycling or

if it contracts with a third party the task of collection for the express

purpose of reuse, recycling or refurbishment

3.2

If it supports infrastructure for product recovery and recycling through

joint ventures, partnerships or by funding research into recycling

technologies

3.3

Whether its product take-back, recovery and recycling efforts are

voluntary or mandatory

3.4

Relevant performance measures or targets for its product take-back,

recovery and recycling efforts such as the total amount of material

recovered and the total amount of material recycled

Wood Supply Chain Management

Topic Summary

The Building Products & Furnishings industry uses large amounts of wood sourced from

forests worldwide. Unsustainable production and timber harvesting can result in adverse

environmental and social impacts, including biodiversity loss and harm to the livelihoods

of forest-dependent communities. Entities inadvertently may source wood from areas

susceptible to unsustainable forestry practices. Reports of illegal logging, environmental

pollution or adverse impacts on communities can result in reputational repercussions

that can damage an entity’s brand value, affecting demand for their products. In

addition, regulations banning the importation of illegally produced wood can result in

supply constraints, penalties and further damage to brand value. To mitigate these risks,

entities increasingly are adopting third-party certifications verifying wood is grown and

harvested in a sustainable manner. Obtaining wood sourcing certifications also can

provide entities with a potential growth channel because they can satisfy customer

demand for certified products.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Metrics

CG-BF-430a.1. (1) Total weight of wood fibre materials purchased, (2) percentage

from third-party certified forestlands, (3) percentage by standard and

(4) percentage certified to other wood fibre standards, (5) percentage by standard

The entity shall disclose the total amount of wood fibre materials (in air-dried

metric tons) purchased during the reporting period.

1.1

Wood

fibre

materials

include

wood-fibre-based

raw

materials,

components, and semi-finished and finished goods.

1.2

The scope of wood-fibre-based materials includes all inputs processed to be

sold as finished goods, including recycled raw materials, virgin raw

materials and goods consumed directly in the production process,

excluding biomass for energy.

1.3

If wood fibre comprises a portion of a material, component or product, the

entity shall include the portion in the total amount.

The entity shall disclose the percentage of its total wood fibre materials purchased

that have been sourced from forestlands certified to a third-party forest

management standard.

2.1

Third-party forest management standards are those certifying forests are

harvested in a sustainable manner and ensuring adherence to

environmental and social criteria including legal compliance, land rights,

community and worker relations, environmental impact and biodiversity,

forest management plans and practices, land use, wildlife habitat

conservation and water conservation, among others.

2.2

Third-party forest management standards include:

2.2.1

American Tree Farm (ATFS)

2.2.2

Forest Stewardship Council (FSC) (Forest Management and Chain of

Custody certifications)

2.2.3

Programme for the Endorsement of Forest Certification (PEFC)

Chain of Custody certifications

2.2.4

Forest certification systems endorsed by the PEFC

2.2.5

Sustainable Forest Initiative (SFI) Forest Management and Chain of

Custody certifications

2.3

The percentage shall be calculated as the weight (in air-dried metric tons)

of the entity’s wood fibre materials purchased during the reporting period

sourced from forestlands certified to one or more of the third-party forest

management standards divided by the total weight (in air-dried metric

tons) of wood fibre materials purchased during the reporting period.

2.3.1

Wood fibre certified to more than one third-party forest

management standard shall be accounted for by the entity only

once.

IFRS S2 INDUSTRY-BASED GUIDANCE

The entity shall disclose the percentage of its total wood fibre materials sourced

from forestlands certified to each applicable third-party forest management

standard, separately by standard.

3.1

The percentage shall be calculated as the weight (in air-dried metric tons)

of the entity’s wood fibre materials purchased during the reporting period

sourced from forestlands certified to each applicable third-party forest

management standard divided by the total weight (in air-dried metric tons)

of wood fibre materials purchased during the reporting period.

3.1.1

Wood-fibre certified to more than one third-party forest

management standard shall be accounted for by the entity in its

calculations for each applicable standard.

The entity shall disclose the percentage of total wood fibre materials purchased

that have been certified to wood fibre standards.

4.1

Wood fibre standards exclude third-party forest management standards.

4.2

Wood fibre standards include:

4.2.1

SFI Certified Fibre Sourcing Standard

4.2.2

FSC Controlled Wood Standard

4.2.3

PEFC Controlled Wood Standard

4.2.4

Recycled wood fibre standards that include post- and pre-consumer

reclaimed material (for example, PEFC Recycled Label and FSC

Recycled Label)

4.2.5

Any other due diligence standards related to wood fibre sourcing

requirements for wood fibre from non-certified forestlands

4.3

The percentage shall be calculated as the weight (in air-dried metric tons)

of the entity’s wood fibre materials purchased during the reporting period

certified to wood fibre standards divided by the total weight (in air-dried

metric tons) of wood fibre materials purchased during the reporting

period.

4.3.1

Wood-fibre certified to more than one wood fibre standard shall be

accounted for by the entity only once.

The entity shall disclose the percentage of its wood fibre materials purchased that

have been certified to wood fibre standards, separately by standard.

5.1

The percentage shall be calculated as the weight (in air-dried metric tons)

of the entity’s wood fibre materials purchased during the reporting period

certified to each applicable wood fibre standard divided by the total weight

(in air-dried metric tons) of wood fibre materials purchased during the

reporting period.

5.1.1

Wood-fibre certified to more than one third-party wood fibre

standard shall be accounted for by the entity in its calculations for

each applicable standard.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Note to CG-BF-430a.1

The entity shall describe its practices for sourcing wood fibre materials from

forestlands not certified to a third-party forest management standard and for

sourcing wood fibre materials not certified to other wood fibre certification

standards.

The entity shall describe its policies to verify the forestry management and

harvesting practices of suppliers, which include codes of conduct, audits or

contracts.

The scope of disclosure shall include how the entity’s sourcing practices and

policies consider the following criteria:

3.1

Wood legality and compliance with applicable jurisdictional laws or

regulations

3.2

Wood sourced from areas of protected conservation status or high

biodiversity value

3.3

Logging in or near areas of endangered species habitat

3.4

Logging in or near areas of indigenous peoples’ land

3.5

The forestry management and harvesting practices of suppliers, including

environmental impact assessments or forestry management plans

3.6

The use of genetically modified organisms (GMOs), pesticides or other

chemicals in forests

3.7

Criteria outlined in the definition of SFI ‘controversial sources’, the

definition of FSC ‘controlled wood’ or the equivalent

The entity also may disclose its wood fibre sources (for example, from corporate,

private or government owned forestlands and whether fibre is grown domestically

or internationally) and the potential risks associated with procuring fibre from

these sources.

IFRS S2 INDUSTRY-BASED GUIDANCE

Volume 4—E-Commerce

Industry Description

E-Commerce industry entities provide an online marketplace for other entities or

individuals to sell their goods and services, as well as retailers and wholesalers that

provide an exclusively web-based platform for consumers to buy goods and services.

Entities in this industry sell to consumers as well as to other businesses. Because of the

accessibility of e-commerce sites, the industry is a global marketplace for buyers and

sellers.

Note: This industry scope applies only to ‘pure-play’ e-commerce operations and does not

address the manufacturing or brick-and-mortar retail operations of entities. Many

consumer goods manufacturers and retailers have incorporated or are in the process of

incorporating an e-commerce component to their business. Separate standards exist for

the Multiline and Specialty Retailers & Distributors (CG-MR); Apparel, Accessories &

Footwear (CG-AA); and Toys & Sporting Goods (CG-TS) industries. Depending on the

specific activities and operations of entities in these industries, disclosure topics and

metrics associated with the E-Commerce industry also may be relevant.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Hardware

Infrastructure

Energy &

Water

Management

(1) Total energy consumed,

(2) percentage grid electricity and

(3) percentage renewable

Quantitative

Gigajoules

(GJ),

Percentage

(%)

CG-EC-130a.1

(1) Total water withdrawn, (2) total water

consumed; percentage of each in

regions with High or Extremely High

Baseline Water Stress

Quantitative

Thousand

cubic metres

(m³),

Percentage

(%)

CG-EC-130a.2

Discussion of the integration of

environmental considerations into

strategic planning for data centre needs

Discussion

and Analysis

n/a

CG-EC-130a.3

Product

Packaging &

Distribution

Total greenhouse gas (GHG) footprint of

product shipments

Quantitative

Metric tons (t)

CO₂-e

CG-EC-410a.1

Discussion of strategies to reduce the

environmental impact of product

delivery

Discussion

and Analysis

n/a

CG-EC-410a.2

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Entity-defined measure of user activity 6

Quantitative

Number

CG-EC-000.A

continued...

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

...continued

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Data processing capacity, percentage outsourced 7

Quantitative

See note

CG-EC-000.B

Number of shipments

Quantitative

Number

CG-EC-000.C

Hardware Infrastructure Energy & Water Management

Topic Summary

The E-Commerce industry uses a large part of the energy it consumes to power critical

hardware and IT infrastructure in data centres. Data centres must be powered

continuously, and disruptions to the energy supply can have a material impact on

operations, depending on the disruption magnitude and timing. Entities also face a trade-

off between energy and water consumption for their data centre cooling needs. Cooling

data centres with water instead of chillers improves energy efficiency, but this method

can result in dependence on potentially scarce local water resources. Entities that

effectively manage this issue may benefit from cost savings and minimise reputational

risks, because concerns over energy and water use are growing.

Metrics

CG-EC-130a.1. (1) Total energy consumed, (2) percentage grid electricity and

(3) percentage renewable

The entity shall disclose (1) the total amount of energy it consumed as an

aggregate figure, in gigajoules (GJ).

1.1

The scope of energy consumption includes energy from all sources,

including energy purchased from external sources and energy produced by

the entity itself (self-generated). For example, direct fuel usage, purchased

electricity, and heating, cooling and steam energy are all included within

the scope of energy consumption.

1.2

The scope of energy consumption includes only energy directly consumed

by the entity during the reporting period.

1.3

In calculating energy consumption from fuels and biofuels, the entity shall

use higher heating values (HHV), also known as gross calorific values

(GCV), which are measured directly or taken from the Intergovernmental

Panel on Climate Change (IPCC).

Note to CG-EC-000.A – The entity shall define and disclose a basic measure of user activity

suitable for its business activities. This measure may be sales transactions, purchase

transactions, number of searches, monthly active users, page views, and/or unique URLs.

Note to CG-EC-000B – Data processing capacity shall be reported in units of measure typically

tracked by the entity or used as the basis for contracting its IT services needs, such as million

service units (MSUs), million instructions per second (MIPS), mega floating-point operations per

second (MFLOPS), compute cycles, or other units of measure. Alternatively, the entity may

disclose owned and outsourced data processing needs in other units of measure, such as rack

space or data centre square footage. The percentage outsourced shall include co-location

facilities and cloud services (e.g., Platform as a Service and Infrastructure as a Service).

IFRS S2 INDUSTRY-BASED GUIDANCE

The entity shall disclose (2) the percentage of energy it consumed that was

supplied from grid electricity.

2.1

The percentage shall be calculated as purchased grid electricity

consumption divided by total energy consumption.

The entity shall disclose (3) the percentage of energy it consumed that was

renewable energy.

3.1

Renewable energy is defined as energy from sources that are replenished

at a rate greater than or equal to their rate of depletion, such as

geothermal, wind, solar, hydro and biomass.

3.2

The percentage shall be calculated as renewable energy consumption

divided by total energy consumption.

3.3

The scope of renewable energy includes renewable fuel the entity

consumed, renewable energy the entity directly produced and renewable

energy the entity purchased, if purchased through a renewable power

purchase agreement (PPA) that explicitly includes renewable energy

certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy

Certified utility or supplier programme, or other green power products

that explicitly include RECs or GOs, or for which Green‐e Energy Certified

RECs are paired with grid electricity.

3.3.1

For any renewable electricity generated on-site, any RECs and GOs

shall be retained (not sold) and retired or cancelled on behalf of the

entity for the entity to claim them as renewable energy.

3.3.2

For renewable PPAs and green power products, the agreement shall

explicitly include and convey that RECs and GOs be retained or

replaced and retired or cancelled on behalf of the entity for the

entity to claim them as renewable energy.

3.3.3

The renewable portion of the electricity grid mix that is outside of

the control or influence of the entity is excluded from the scope of

renewable energy.

3.4

For the purposes of this disclosure, the scope of renewable energy from

biomass sources is limited to materials certified to a third-party standard

(for example, Forest Stewardship Council, Sustainable Forest Initiative,

Programme for the Endorsement of Forest Certification or American Tree

Farm System), materials considered eligible sources of supply according to

the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or

Green-e regional standards, or materials eligible for an applicable

jurisdictional renewable portfolio standard.

The entity shall apply conversion factors consistently for all data reported under

this disclosure, such as the use of HHVs for fuel usage (including biofuels) and

conversion of kilowatt hours (kWh) to GJ (for energy data including electricity

from solar or wind energy).

The entity may disclose the trailing twelve-month (TTM) weighted average power

usage effectiveness (PUE) for its data centres.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

5.1

PUE is defined as the ratio of the total amount of power a computer data

centre facility uses to the amount of power delivered to computing

equipment.

5.2

If disclosing PUE, the entity shall follow the guidance and calculation

methodology described in PUE™: A Comprehensive Examination of the Metric

(2014), published by ASHRAE and The Green Grid Association.

CG-EC-130a.2. (1) Total water withdrawn, (2) total water consumed; percentage

of each in regions with High or Extremely High Baseline Water Stress

The entity shall disclose the amount of water, in thousands of cubic metres,

withdrawn from all sources.

1.1

Water sources include surface water (including water from wetlands,

rivers, lakes and oceans), groundwater, rainwater collected directly and

stored by the entity, and water and wastewater obtained from municipal

water supplies, water utilities or other entities.

The entity may disclose portions of its supply by source if, for example, significant

portions of withdrawals are from non-freshwater sources.

2.1

Fresh water may be defined according to the local laws and regulations

where the entity operates. If no legal definition exists, fresh water shall be

considered to be water that has less than 1,000 parts per million of

dissolved solids.

2.2

Water obtained from a water utility in compliance with jurisdictional

drinking water regulations can be assumed to meet the definition of fresh

water.

The entity shall disclose the amount of water, in thousands of cubic metres,

consumed in its operations.

3.1

Water consumption is defined as:

3.1.1

Water that evaporates during withdrawal, use and discharge;

3.1.2

Water that is directly or indirectly incorporated into the entity’s

product or service

3.1.3

Water that does not otherwise return to the same catchment area

from which it was withdrawn, such as water returned to another

catchment area or the sea.

The entity shall analyse all its operations for water risks and identify activities

that withdraw and consume water in locations with High (40–80%) or Extremely

High (>80%) Baseline Water Stress as classified by the World Resources Institute’s

(WRI) Water Risk Atlas tool, Aqueduct.

The entity shall disclose water withdrawn in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water withdrawn.

The entity shall disclose water consumed in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water consumed.

IFRS S2 INDUSTRY-BASED GUIDANCE

CG-EC-130a.3. Discussion of the integration of environmental considerations into

strategic planning for data centre needs

The entity shall discuss the environmental considerations integrated into siting,

design, construction, refurbishment and operational specifications for its data

centres, including factors related to energy and water consumption.

1.1

Environmental factors may include energy-efficiency standards; layout

design, such as 'hot aisle/cold aisle' layouts; and location-based factors,

such as accounting for regional humidity, average temperature, water

availability and groundwater stress, water permits, jurisdictional carbon

legislation or pricing, and the carbon intensity of electricity from the local

grid.

The scope of disclosure shall include data centres currently owned and operated

by the entity, data centres that have been planned or are under construction, and

outsourced data centre services.

The entity shall discuss how it incorporates environmental considerations into

decisions related to its data centres made during the reporting period, including if

they influenced decisions to insource or outsource data centre services, improve

efficiency of existing data centres or construct new data centres.

Product Packaging & Distribution

Topic Summary

A significant part of the E-Commerce industry’s added value comes from an entity’s

ability to move a wide array of goods efficiently to consumers who would otherwise have

to personally travel to collect the goods from brick-and-mortar stores. As the volume of

packaging shipments increases, the industry may become more exposed to

environmental externalities, such as carbon pricing and rising fuel costs that present

risks associated with the shipping of products. While entities that outsource shipping

and logistics have less control over the specific processes of shipping operations, they still

can select suppliers with more energy-efficient business practices. Because this is a highly

competitive and low-margin industry, the ability to reduce shipping costs through fuel

reduction and more efficient routing may permit entities to pass those savings on to their

customers. E-commerce entities also have an incentive to minimise the use of packaging.

Efficient packaging can decrease costs by reducing the amount of purchased packaging

material, as well as saving logistics costs because more products may fit into a single

shipping load.

Metrics

CG-EC-410a.1. Total greenhouse gas (GHG) footprint of product shipments

The entity shall disclose the complete tank-to-wheels greenhouse gas (GHG)

footprint, in metric tons of CO2-e, associated with outbound shipment of the

entity’s products.

1.1

Tank-to-wheels emissions relate to vehicle processes and exclude upstream

emissions associated with primary energy production (well-to-tank

emissions).

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

1.2

The entity shall calculate its disclosure according to EN 16258:2012 –

Methodology for calculation and declaration of energy consumption and

GHG emissions of transport services (freight and passengers).

1.2.1

Calculations shall be consistent with the methodology used to

calculate the ‘tank-to-wheels GHG emissions (Gt)’ result that is

described in EN 16258:2012.

1.2.2

Determination of transportation system scope, boundaries and any

necessary allocations shall be consistent with the methodology

described in EN 16258:2012.

The scope of disclosure includes emissions from all freight transportation and

logistics activities associated with the outbound shipment of the entity’s products,

including those from contract carriers and outsourced freight forwarding services

and logistics providers (Scope 3) as well as those from the entity’s own assets

(Scope 1).

The scope of disclosure includes emissions from all modes of transportation, such

as road freight, air freight, barge transport, marine transport, and rail transport.

Consistent with EN 16258:2012, disclosure may be based on calculations from a

mix of categories of emissions values (specific measured values, transport

operator vehicle-type- or route-type-specific values, transport operator fleet values

and default values).

If relevant and necessary for interpretation of disclosure, the entity shall describe

its allocation methods, emissions values, boundaries, mix of transport services

used and other information.

CG-EC-410a.2. Discussion of strategies to reduce the environmental impact of

product delivery

The entity shall discuss its strategies to reduce the environmental impact of

fulfilment and product delivery, including impacts associated with packaging

materials and those associated with product transportation.

Relevant strategies to discuss may include:

2.1

Discussion of logistics selection, mode selection and management (for

example, rail transport vs air freight transport) or operation for route

efficiency

2.2

Discussion of packaging choices that may include decisions to use recycled

or renewable (for example, bio-based plastic) packaging material, decisions

to optimise the amount of packaging materials used (for example, source

reduction), use of refillable or reusable packaging, and design for efficient

shipping and transport

2.3

Discussion of fuel choices and vehicle choices for fleets owned or operated

by the entity, such as decisions to use renewable and low-emission fuels

and low-emission vehicles

IFRS S2 INDUSTRY-BASED GUIDANCE

2.4

Other relevant strategies, such as efforts to reduce idling of vehicles owned

or operated by the entity, innovations to improve the efficiency of ‘last-

mile’ delivery and strategies to optimise delivery times to reduce traffic

congestion

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Volume 5—Household & Personal Products

Industry Description

Household & Personal Products industry entities manufacture a wide range of goods for

personal and commercial consumption, including cosmetics, household and industrial

cleaning supplies, soaps and detergents, sanitary paper products, household batteries,

razors and kitchen utensils. Household and personal products entities operate globally

and typically sell their products to mass merchants, grocery stores, membership club

stores, drug stores, high-frequency stores, distributors and e-commerce retailers. Some

entities sell products through independent representatives rather than third-party retail

establishments.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Water

Management

(1) Total water withdrawn, (2) total water

consumed; percentage of each in

regions with High or Extremely High

Baseline Water Stress

Quantitative

Thousand

cubic metres

(m³),

Percentage

(%)

CG-HP-140a.1

Description of water management risks

and discussion of strategies and

practices to mitigate those risks

Discussion

and Analysis

n/a

CG-HP-140a.2

Environmental

& Social

Impacts of

Palm Oil

Supply Chain

Amount of palm oil sourced, percentage

certified through the Roundtable on

Sustainable Palm Oil (RSPO) supply

chains as (a) Identity Preserved, (b)

Segregated, (c) Mass Balance or (d)

Book & Claim

Quantitative

Metric tons (t),

Percentage

(%)

CG-HP-430a.1

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Units of products sold, total weight of products sold

Quantitative

Number,

Metric tons (t)

CG-HP-000.A

Number of manufacturing facilities

Quantitative

Number

CG-HP-000.B

Water Management

Topic Summary

Water is vital to the Household & Personal Products industry, both as a coolant in

manufacturing processes and as a main input for many of the industry’s products. Water

is becoming a scarce resource around the world because of population growth and

increasing consumption, rapid urbanisation, and declining supplies because of subsurface

aquifer depletion, drought and climate change. Many entities in this industry have

operations in regions of the world facing water scarcity. Without careful planning,

entities could face increased costs or lose water access in these regions, which may be a

IFRS S2 INDUSTRY-BASED GUIDANCE

risk to production. Having rigorous checks in place to ensure a steady supply of water to

all factories, as well as investing in technology to increase water use efficiency, will help

entities reduce water-related risks as water scarcity becomes an increasingly global issue.

Metrics

CG-HP-140a.1. (1) Total water withdrawn, (2) total water consumed; percentage

of each in regions with High or Extremely High Baseline Water Stress

The entity shall disclose the amount of water, in thousands of cubic metres,

withdrawn from all sources.

1.1

Water sources include surface water (including water from wetlands,

rivers, lakes and oceans), groundwater, rainwater collected directly and

stored by the entity, and water and wastewater obtained from municipal

water supplies, water utilities or other entities.

The entity may disclose portions of its supply by source if, for example, significant

portions of withdrawals are from non-freshwater sources.

2.1

Fresh water may be defined according to the local laws and regulations

where the entity operates. If no legal definition exists, fresh water shall be

considered to be water that has less than 1,000 parts per million of

dissolved solids.

2.2

Water obtained from a water utility in compliance with jurisdictional

drinking water regulations can be assumed to meet the definition of fresh

water.

The entity shall disclose the amount of water, in thousands of cubic metres,

consumed in its operations.

3.1

Water consumption is defined as:

3.1.1

Water that evaporates during withdrawal, use and discharge

3.1.2

Water that is directly or indirectly incorporated into the entity’s

product or service

3.1.3

Water that does not otherwise return to the same catchment area

from which it was withdrawn, such as water returned to another

catchment area or the sea.

The entity shall analyse all its operations for water risks and identify activities

that withdraw and consume water in locations with High (40–80%) or Extremely

High (>80%) Baseline Water Stress as classified by the World Resources Institute’s

(WRI) Water Risk Atlas tool, Aqueduct.

The entity shall disclose water withdrawn in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water withdrawn.

The entity shall disclose water consumed in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water consumed.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

CG-HP-140a.2. Description of water management risks and discussion of

strategies and practices to mitigate those risks

The entity shall describe its water management risks associated with water

withdrawals, water consumption and discharge of water or wastewater.

1.1

Risks associated with water withdrawals and water consumption include

risks to the availability of adequate, clean water resources, which include:

1.1.1

Environmental constraints—such as operating in water-stressed

regions,

drought,

concerns

aquatic

impingement

entrainment, interannual or seasonal variability, and risks from

the impact of climate change

1.1.2

Regulatory and financial constraints—such as volatility in water

costs, stakeholder perceptions and concerns related to water

withdrawals (for example, those from local communities, non-

governmental organisations and regulatory agencies), direct

competition with and impact from the actions of other users (for

example, commercial and municipal users), restrictions to

withdrawals because of regulations, and constraints on the entity’s

ability to obtain and retain water rights or permits

1.2

Risks associated with the discharge of water or wastewater include the

ability to obtain rights or permits related to discharges, regulatory

compliance related to discharges, restrictions to discharges, the ability to

maintain control over the temperature of water discharges, liabilities,

reputational risks and increased operating costs because of regulation,

stakeholder perceptions and concerns related to water discharges (for

example, those from local communities, non-governmental organisations

and regulatory agencies).

The entity may describe water management risks in the context of:

2.1

How risks may vary by withdrawal source, including surface water

(including water from wetlands, rivers, lakes and oceans), groundwater,

rainwater collected directly and stored by the entity, and water and

wastewater obtained from municipal water supplies, water utilities or

other entities; and

2.2

How risks may vary by discharge destinations, including surface water,

groundwater or wastewater utilities.

The entity may discuss the potential effects that water management risks may

have on its operations and the time line over which such risks are expected to

manifest.

3.1

Effects include those associated with costs, revenue, liabilities, continuity

of operations and reputation.

The entity shall discuss its short- and long-term strategies or plans to mitigate

water management risks, which include:

IFRS S2 INDUSTRY-BASED GUIDANCE

4.1

The scope of its strategy, plans, goals or targets, such as how they relate to

various business units, geographies or water-consuming operational

processes.

4.2

Any water management goals or targets it has prioritised, and an analysis

of performance against those goals or targets.

4.2.1

Goals and targets include those associated with reducing water

withdrawals,

reducing

water

consumption,

reducing

water

discharges, reducing aquatic impingements, improving the quality

of water discharges and regulatory compliance.

4.3

The activities and investments required to achieve the plans, goals or

targets, and any risks or limiting factors that might affect achievement of

the plans or targets.

4.4

Disclosure of strategies, plans, goals or targets shall be limited to activities

that were ongoing (active) or reached completion during the reporting

period.

For water management targets, the entity shall additionally disclose:

5.1

Whether the target is absolute or intensity-based, and the metric

denominator if it is an intensity-based target.

5.2

The time lines for the water management activities, including the start

year, the target year and the base year.

5.3

The mechanism(s) for achieving the target, including:

5.3.1

Efficiency efforts, such as the use of water recycling or closed-loop

systems;

5.3.2

Product innovations, such as redesigning products or services to

require less water;

5.3.3

Process and equipment innovations, such as those that enable the

reduction of aquatic impingements or entrainments;

5.3.4

Use of tools and technologies (for example, the World Wildlife

Fund Water Risk Filter, the Global Water Tool and Water Footprint

Network Footprint Assessment Tool) to analyse water use, risks and

opportunities; and

5.3.5

Collaborations or programmes in place with the community or

other organisations

5.4

The percentage reduction or improvement from the base year, in which

the base year is the first year against which water management targets are

evaluated towards the achievement of the target.

The entity shall discuss whether its water management practices result in any

additional lifecycle impacts or trade-offs in its organisation, including trade-offs

in land use, energy production and greenhouse gas (GHG) emissions, and why the

entity chose these practices despite lifecycle trade-offs.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Environmental & Social Impacts of Palm Oil Supply Chain

Topic Summary

Palm oil has increased in popularity as a cheap input for a wide range of goods in the

Household & Personal Products industry, including cleaning products, candles and

cosmetics. Palm oil harvesting in specific regions of the world may contribute to

deforestation, GHG emissions and other environmental and social problems. If not

sourced responsibly, palm oil materials contribute to environmental and social

externalities that can present reputational and regulatory risks for entities. Furthermore,

entities in this industry are exposed to the risk of supply chain disruptions, input price

increases and reputational damage associated with environmental and social externalities

from palm oil sourcing. Entities face pressure to track and responsibly source palm oil

and ensure minimum working condition standards in the supply chain, because palm oil

production often is associated with labour issues. Implementing sourcing standards can

reduce these risks, as can product-design phase innovations to reduce dependence on

controversial materials such as palm oil.

Metrics

CG-HP-430a.1. Amount of palm oil sourced, percentage certified through the

Roundtable on Sustainable Palm Oil (RSPO) supply chains as (a) Identity

Preserved, (b) Segregated, (c) Mass Balance or (d) Book & Claim

The entity shall disclose the amount, in metric tons, of palm oil sourced during

the reporting period.

1.1

The scope of palm oil includes palm kernel oil and palm kernel expeller.

The entity shall disclose the percentage, on a weight basis, of palm oil it sourced

that has been third-party certified to bear a Roundtable on Sustainable Palm Oil

(RSPO) claim for each of the RSPO supply chain models: (a) Identity Preserved (IP),

(b) Segregated (SG), (c) Mass Balance (MB) or (d) Book & Claim (B&C).

2.1

B&C transactions are represented by ‘RSPO Credits’ purchased in the RSPO

PalmTrace platform.

2.2

The percentage shall be calculated as the weight in each respective RSPO

supply chain model (IP, SG, MB or B&C) of RSPO-certified palm oil sourced

by the entity divided by the total weight, in metric tons, of palm oil

sourced by the entity.

The entity may discuss other strategies, approaches and mechanisms used to

manage risks and opportunities associated with the environmental and social

impacts of palm oil sourcing.

IFRS S2 INDUSTRY-BASED GUIDANCE

Volume 6—Multiline and Specialty Retailers & Distributors

Industry Description

The Multiline and Specialty Retailers & Distributors industry encompasses a variety of

retailing categories such as department stores, mass merchants, home products stores

and warehouse clubs, as well as a smaller segment of distributors like electronics

wholesalers and automotive wholesalers. These entities (except for the distribution

segment) commonly manage global supply chains to anticipate consumer demands, keep

costs low and keep products stocked in their brick-and-mortar storefronts. This is a

highly competitive industry in which each category generally has a small number of

important players characterised by generally low margins. The relatively substitutable

nature of retail makes entities in this industry especially susceptible to reputational risks.

Note: Separate standards exist for the Food Retailers & Distributors (FB-FR), Drug Retailers

(HC-DR), E-Commerce (CG-EC) and Apparel, Accessories & Footwear (CG-AA) industries.

Retail entities involved in food or drug retail, e-commerce, or apparel, accessories and

footwear manufacturing should also consider the disclosure topics and metrics outlined

in these other standards.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Energy

Management

in Retail &

Distribution

(1) Total energy consumed,

(2) percentage grid electricity and

(3) percentage renewable

Quantitative

Gigajoules

(GJ),

Percentage

(%)

CG-MR-130a.1

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Number of: (1) retail locations and (2) distribution centres

Quantitative

Number

CG-MR-000.A

Total area of: (1) retail space and (2) distribution centres

Quantitative

Square

metres (m²)

CG-MR-000.B

Energy Management in Retail & Distribution

Topic Summary

Entities in this industry require significant amounts of energy for retail facilities and

warehouses. An increasing number of greenhouse gas (GHG) emissions regulations and

incentives for energy efficiency and renewable energy may result in price increases for

conventional electricity sources while making alternative sources more cost-competitive.

Fossil fuel-based energy production and consumption contribute to significant

environmental impacts, including climate change and pollution. Energy sourcing

decisions can create trade-offs related to energy supply costs and operational reliability.

Overall energy efficiency and access to alternative energy sources are becoming

increasingly important for entities to manage. Efficiency in this area can have financial

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

implications through direct cost savings, which are particularly beneficial in this low-

margin industry.

Metrics

CG-MR-130a.1. (1) Total energy consumed, (2) percentage grid electricity and

(3) percentage renewable

The entity shall disclose (1) the total amount of energy it consumed as an

aggregate figure, in gigajoules (GJ).

1.1

The scope of energy consumption includes energy from all sources,

including energy purchased from external sources and energy produced by

the entity itself (self-generated). For example, direct fuel usage, purchased

electricity, and heating, cooling and steam energy are all included within

the scope of energy consumption.

1.2

The scope of energy consumption includes only energy directly consumed

by the entity during the reporting period.

1.3

In calculating energy consumption from fuels and biofuels, the entity shall

use higher heating values (HHV), also known as gross calorific values

(GCV), which are measured directly or taken from the Intergovernmental

Panel on Climate Change (IPCC).

The entity shall disclose (2) the percentage of energy it consumed that was

supplied from grid electricity.

2.1

The percentage shall be calculated as purchased grid electricity

consumption divided by total energy consumption.

The entity shall disclose (3) the percentage of energy it consumed that was

renewable energy.

3.1

Renewable energy is defined as energy from sources that are replenished

at a rate greater than or equal to their rate of depletion, such as

geothermal, wind, solar, hydro and biomass.

3.2

The percentage shall be calculated as renewable energy consumption

divided by total energy consumption.

3.3

The scope of renewable energy includes renewable fuel the entity

consumed, renewable energy the entity directly produced and renewable

energy the entity purchased, if purchased through a renewable power

purchase agreement (PPA) that explicitly includes renewable energy

certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy

Certified utility or supplier programme, or other green power products

that explicitly include RECs or GOs, or for which Green‐e Energy Certified

RECs are paired with grid electricity.

3.3.1

For any renewable electricity generated on-site, any RECs and GOs

shall be retained (not sold) and retired or cancelled on behalf of the

entity for the entity to claim them as renewable energy.

IFRS S2 INDUSTRY-BASED GUIDANCE

3.3.2

For renewable PPAs and green power products, the agreement shall

explicitly include and convey that RECs and GOs be retained or

replaced and retired or cancelled on behalf of the entity for the

entity to claim them as renewable energy.

3.3.3

The renewable portion of the electricity grid mix that is outside of

the control or influence of the entity is excluded from the scope of

renewable energy.

3.4

For the purposes of this disclosure, the scope of renewable energy from

biomass sources is limited to materials certified to a third-party standard

(for example, Forest Stewardship Council, Sustainable Forest Initiative,

Programme for the Endorsement of Forest Certification or American Tree

Farm System), materials considered eligible sources of supply according to

the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or

Green-e regional standards, or materials eligible for an applicable

jurisdictional renewable portfolio standard.

The entity shall apply conversion factors consistently for all data reported under

this disclosure, such as the use of HHVs for fuel usage (including biofuels) and

conversion of kilowatt hours (kWh) to GJ (for energy data including electricity

from solar or wind energy).

Volume 7—Coal Operations

Industry Description

The Coal Operations industry includes entities that mine coal and those that

manufacture coal products. Mining activity covers both underground and surface

mining, and thermal and metallurgical coal.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Greenhouse

Gas

Emissions

Gross global Scope 1 emissions,

percentage covered under emissions-

limiting regulations

Quantitative

Metric tons (t)

CO₂-e,

Percentage

(%)

EM-CO-110a.1

Discussion of long- and short-term

strategy or plan to manage Scope 1

emissions, emissions reduction targets,

and an analysis of performance against

those targets

Discussion

and Analysis

n/a

EM-CO-110a.2

Water

Management

(1) Total water withdrawn, (2) total water

consumed; percentage of each in

regions with High or Extremely High

Baseline Water Stress

Quantitative

Thousand

cubic metres

(m³),

Percentage

(%)

EM-CO-140a.1

Number of incidents of non-compliance

associated with water quality permits,

standards and regulations

Quantitative

Number

EM-CO-140a.2

Reserves

Valuation &

Capital

Expenditures

Sensitivity of coal reserve levels to

future price projection scenarios that

account for a price on carbon emissions

Quantitative

Million metric

tons (Mt)

EM-CO-420a.1

Estimated carbon dioxide emissions

embedded in proven coal reserves

Quantitative

Metric tons (t)

CO₂-e

EM-CO-420a.2

Discussion of how price and demand for

coal or climate regulation influence the

capital expenditure strategy for

exploration, acquisition and

development of assets

Discussion

and Analysis

n/a

EM-CO-420a.3

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Production of thermal coal

Quantitative

Million metric

tons (Mt)

EM-CO-000.A

Production of metallurgical coal

Quantitative

Million metric

tons (Mt)

EM-CO-000.B

IFRS S2 INDUSTRY-BASED GUIDANCE

Greenhouse Gas Emissions

Topic Summary

Coal operations are energy intensive and generate significant direct greenhouse gas

(GHG) emissions, including carbon dioxide from fuel use and methane released from coal

beds during mining and post-mining activities. Regulatory efforts to reduce GHG

emissions in response to the risks posed by climate change may result in higher

operating and capital expenditures based on the magnitude of their direct emissions.

Operational efficiencies can be achieved through the cost-effective reduction of GHG

emissions. Such efficiencies can mitigate the potential financial impact of increased fuel

costs from regulations that limit—or put a price on—GHG emissions.

Metrics

EM-CO-110a.1. Gross global Scope 1 emissions, percentage covered under

emissions-limiting regulations

The entity shall disclose its gross global Scope 1 greenhouse gas (GHG) emissions

to the atmosphere of the seven GHGs covered under the Kyoto Protocol—carbon

dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),

perfluorocarbons (PFCs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3).

1.1

Emissions of all GHGs shall be consolidated and disclosed in metric tons of

carbon dioxide equivalent (CO2-e), and calculated in accordance with

published 100-year time horizon global warming potential (GWP) values.

To date, the preferred source for GWP values is the Intergovernmental

Panel on Climate Change (IPCC) Fifth Assessment Report (2014).

1.2

Gross emissions are GHGs emitted into the atmosphere before accounting

for offsets, credits or other similar mechanisms that have reduced or

compensated for emissions.

Scope 1 emissions are defined and shall be calculated according to the

methodology contained in The Greenhouse Gas Protocol: A Corporate Accounting and

Reporting Standard(GHG protocol), Revised Edition, March 2004, published by the

World Resources Institute and the World Business Council on Sustainable

Development (WRI/WBCSD).

2.1

These emissions include direct emissions of GHGs from stationary or

mobile sources; these sources include equipment at mine sites, mine

mouth electric generating facilities, coal seam methane emissions,

production and processing facilities, storage facilities, office buildings, and

transportation (marine, road, and rail).

2.2

Acceptable calculation methodologies include those that conform to the

GHG Protocol as the base reference, but provide additional guidance, such as

industry- or region-specific guidance. Examples include:

2.2.1

GHG Reporting Guidance for the Aerospace Industry provided by the

International Aerospace Environmental Group (IAEG)

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

2.2.2

Greenhouse Gas Inventory Guidance: Direct Emissions from Stationary

Combustion Sources provided by the U.S. Environmental Protection

Agency (EPA)

2.2.3

India GHG Inventory Program

2.2.4

ISO 14064-1

2.2.5

Petroleum Industry Guidelines for reporting GHG emissions, 2nd edition,

2011, published by IPIECA

2.2.6

Protocol for the quantification of greenhouse gas emissions from waste

management

activities

published

Entreprises

pour

l’Environnement (EpE)

2.3

GHG emission data shall be consolidated according to the approach with

which the entity consolidates its financial reporting data, which is

generally aligned with the ‘financial control’ approach defined by the GHG

Protocol as well as:

2.3.1

The financial approach detailed in Chapter 3 of the IPIECA/API/OGP

Petroleum Industry Guidelines for Reporting Greenhouse Gas Emissions, 2nd

Edition, 2011 (hereafter, the ‘IPIECA GHG Guidelines’)

2.3.2

The approach provided by the Climate Disclosure Standards Board

(CDSB) that is described in REQ-07, ‘Organisational boundary,’ of

the CDSB Framework for reporting environmental and social information

The entity shall disclose the percentage of its gross global Scope 1 GHG emissions

covered under an emissions-limiting regulation or programme intended to limit

or reduce emissions directly, such as cap-and-trade schemes, carbon tax/fee

systems, and other emissions control (for example, command-and-control

approach) and permit-based mechanisms.

3.1

Examples of emissions-limiting regulations include:

3.1.1

California Cap-and-Trade (California Global Warming Solutions Act)

3.1.2

European Union Emissions Trading Scheme (EU ETS)

3.1.3

Quebec Cap-and-Trade (Quebec Environment Quality Act)

3.2

The percentage shall be calculated as the total amount of gross global

Scope 1 GHG emissions (CO2-e) that are covered under emissions-limiting

regulations divided by the total amount of gross global Scope 1 GHG

emissions (CO2-e).

3.2.1

For emissions subject to more than one emissions-limiting

regulation, the entity shall not account for those emissions more

than once.

3.3

The scope of emissions-limiting regulations excludes emissions covered

under voluntary emissions-limiting regulations (for example, voluntary

trading systems), as well as reporting-based regulations.

IFRS S2 INDUSTRY-BASED GUIDANCE

The entity may discuss any change in its emissions from the previous reporting

period, including whether the change was because of emissions reductions,

divestment, acquisition, mergers, changes in output or changes in calculation

methodology.

In the case that current reporting of GHG emissions to the CDP or other entity

(for example, a national regulatory disclosure program) differs in terms of the

scope and consolidation approach used, the entity may disclose those emissions.

However, primary disclosure shall be according to the guidelines described above.

The entity may discuss the calculation methodology for its emissions disclosure,

such as if data are from continuous emissions monitoring systems (CEMS),

engineering calculations or mass balance calculations.

EM-CO-110a.2. Discussion of long- and short-term strategy or plan to manage

Scope 1 emissions, emissions reduction targets, and an analysis of performance

against those targets

The entity shall discuss its long- and short-term strategy or plan to manage its

Scope 1 greenhouse gas (GHG) emissions.

1.1

Scope 1 emissions are defined according to The Greenhouse Gas Protocol: A

Corporate Accounting and Reporting Standard (GHG Protocol), Revised Edition,

March 2004, published by the World Resources Institute and the World

Business Council on Sustainable Development (WRI/WBCSD).

1.2

The scope of GHG emissions includes the seven GHGs covered under the

Kyoto Protocol—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),

hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride

(SF6), and nitrogen trifluoride (NF3).

The entity shall discuss its emission reduction target(s) and analyse its

performance against the target(s), including, if relevant:

2.1

The scope of the emission reduction target (for example, the percentage of

total emissions to which the target is applicable);

2.2

Whether the target is absolute or intensity-based, and the metric

denominator if it is an intensity-based target;

2.3

The percentage reduction against the base year, with the base year

representing the first year against which emissions are evaluated towards

the achievement of the target;

2.4

The time lines for the reduction activity, including the start year, the

target year and the base year;

2.5

The mechanism(s) for achieving the target; and

2.6

Any circumstances in which the target or base year emissions have been,

or may be, recalculated retrospectively or the target or base year has been

reset.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

The entity shall discuss the activities and investments required to achieve the

plans or targets, and any risks or limiting factors that might affect achievement of

the plans or targets.

The entity shall discuss the scope of its strategies, plans or reduction targets, such

as whether they pertain differently to different business units, geographies or

emissions sources.

The entity shall discuss whether its strategies, plans, or reduction targets are

related to, or associated with, emissions limiting or emissions reporting-based

programmes or regulations (for example, the EU Emissions Trading Scheme,

Quebec Cap-and-Trade System, California Cap-and-Trade Program), including

regional, national, international or sectoral programmes.

Disclosure of strategies, plans or reduction targets shall be limited to activities

that were ongoing (active) or reached completion during the reporting period.

Water Management

Topic Summary

Coal operations have an impact on both the quality and quantity of local water resources.

Coal operations are water intensive. The use of water in coal washing to remove sulphur,

cool drilling equipment and transport coal in slurry pipelines can impact resources. The

severity of these risks can vary depending on the region’s water availability and the

regulatory environment. Reducing water use and contamination also could create

operational efficiencies for entities and lower their operating costs. Wastewater

treatment and discharge often is regulated by jurisdictional authorities. Violating limits

on selenium, sulphate and dissolved solids could affect coal operations entities through

significant penalties, compliance costs, delays in production or higher costs related to

mine closure.

Metrics

EM-CO-140a.1. (1) Total water withdrawn, (2) total water consumed; percentage

of each in regions with High or Extremely High Baseline Water Stress

The entity shall disclose the amount of water, in thousands of cubic metres,

withdrawn from all sources.

1.1

Water sources include surface water (including water from wetlands,

rivers, lakes and oceans), groundwater, rainwater collected directly and

stored by the entity, and water and wastewater obtained from municipal

water supplies, water utilities or other entities.

The entity may disclose portions of its supply by source if, for example, significant

portions of withdrawals are from non-freshwater sources.

2.1

Fresh water may be defined according to the local laws and regulations

where the entity operates. If no legal definition exists, fresh water shall be

considered to be water that has less than 1,000 parts per million of

dissolved solids.

IFRS S2 INDUSTRY-BASED GUIDANCE

2.2

Water obtained from a water utility in compliance with jurisdictional

drinking water regulations can be assumed to meet the definition of fresh

water.

The entity shall disclose the amount of water, in thousands of cubic metres,

consumed in its operations.

3.1

Water consumption is defined as:

3.1.1

Water that evaporates during withdrawal, use and discharge

3.1.2

Water that is directly or indirectly incorporated into the entity’s

product or service

3.1.3

Water that does not otherwise return to the same catchment area

from which it was withdrawn, such as water returned to another

catchment area or the sea

The entity shall analyse all of its operations for water risks and identify activities

that withdraw and consume water in locations with High (40–80%) or Extremely

High (>80%) Baseline Water Stress as classified by the World Resources Institute’s

(WRI) Water Risk Atlas tool, Aqueduct.

The entity shall disclose its water withdrawn in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water withdrawn.

The entity shall disclose its water consumed in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water consumed.

EM-CO-140a.2. Number of incidents of non-compliance associated with water

quality permits, standards and regulations

The entity shall disclose the total number of incidents of non-compliance,

including violations of a technology-based standard and exceedances of quantity

or quality-based standards.

The scope of disclosure includes incidents governed by applicable jurisdictional

statutory permits and regulations, which include the discharge of a hazardous

substance, violation of pre-treatment requirements or total maximum daily load

(TMDL) exceedances.

2.1

Typical parameters of concern include selenium, total dissolved solids

(TDS), sulphate, total suspended solids (TSS) and pH.

The scope of disclosure shall only include incidents of non-compliance that

resulted in a formal enforcement action(s).

3.1

Formal enforcement actions are defined as governmental recognised

actions that address a violation or threatened violation of water quantity

or quality laws, regulations, policies or orders, and can result in

administrative penalty orders, administrative orders and judicial actions,

among others.

Violations shall be disclosed, regardless of their measurement methodology or

frequency. These include violations for:

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

4.1

Continuous discharges, limitations, standards and prohibitions that are

generally expressed as maximum daily, weekly or monthly averages; and

4.2

Non-continuous discharges, limitations that are generally expressed in

terms of frequency, total mass, maximum rate of discharge and mass or

concentration of specified pollutants.

Reserves Valuation & Capital Expenditures

Topic Summary

Coal entities may be unable to extract a significant proportion of their coal reserves if

greenhouse gas (GHG) emissions are controlled to limit global temperature increases.

Stewardship of capital resources while considering medium- to long-term trends,

particularly related to climate change mitigation actions, is critical to prevent asset

impairment and maintain profitability and creditworthiness. Globally, regulations and

policies are and may continue to be put into place to limit GHG emissions from coal-fired

power plants—the customers of coal entities—thus reducing demand for and the price of

coal. Coal demand also is being affected by regulations governing other harmful air

emissions that apply to coal-fired power plants. An expansion of GHG-mitigation

regulations may increase the magnitude of potential financial impacts in the medium to

long term. Along with improved competitiveness of alternative energy technologies,

these jurisdictional regulations and policies pose long-term risks for the reserves and

capital investments of coal operations entities.

Metrics

EM-CO-420a.1. Sensitivity of coal reserve levels to future price projection

scenarios that account for a price on carbon emissions

The entity shall perform a sensitivity analysis of its reserves to determine how

several future scenarios may affect the determination of whether the reserves are

proven or probable.

The entity shall analyse the sensitivity of its current proven and probable reserves

using the price trajectories published by the International Energy Agency (IEA) in

its World Energy Outlook (WEO) publication, including:

2.1

Current Policies Scenario, which assumes no changes in policies from the

mid-point of the year of publication of the WEO

2.2

New Policies Scenario, which assumes that broad policy commitments and

plans that have been announced by countries—including national pledges

to reduce greenhouse gas emissions and plans to phase out fossil-energy

subsidies—occur, even if the measures to implement these commitments

have yet to be identified or announced. This broadly serves as the IEA

baseline scenario.

2.3

Sustainable Development Scenario, which assumes an energy pathway

occurs that is consistent with the goal of limiting the global increase in

temperature to 1.5°C by limiting concentration of greenhouse gases in the

atmosphere.

IFRS S2 INDUSTRY-BASED GUIDANCE

2.4

The entity shall consider the WEO scenarios as a normative reference, thus

any updates to the WEO made year-on-year shall be considered updates to

this guidance.

2.5

Reserves are defined as mineral deposits that could be economically and

legally extracted or produced at the time of the reserve determination.

2.6

Proven reserves are reserves for which (a) quantity is computed from

dimensions revealed in outcrops, trenches, workings or drill holes; grade

or quality are computed from the results of detailed sampling and (b) the

sites for inspection, sampling and measurement are spaced so closely and

the geographical character is so well defined that size, shape, depth and

mineral content of reserves are well established.

2.7

Probable reserves are reserves for which quantity and grade or quality are

computed from information like that used for proven (measured) reserves,

but the sites for inspection, sampling and measurement are farther apart

or are otherwise less adequately spaced. The degree of assurance, although

lower than that for proven (measured) reserves, is high enough to assume

continuity between points of observation.

The entity shall conduct a reserves sensitivity analysis and disclose, in the

aggregate, an estimate of reserves estimated for each product type based on

different price and cost criteria, such as a range of prices and costs that may

reasonably be achieved, including standardised futures prices or management’s

own forecasts.

The entity shall also disclose the price and cost schedules and assumptions on

which disclosed values are based.

The entity may summarise its findings in the following table format:

Table 3. Sensitivity of Reserves to Prices By Principal Product Type and Price

Scenario

PRICE CASE

PROVEN RESERVES

PROBABLE RESERVES

(Scenario)

Coal

Product A

Coal

Product A

(tons)

(measure)

(tons)

(measure)

Current Policies Scenario

(base)

New Policies Scenario

Sustainable Development

Scenario

The entity may disclose the sensitivity of its reserve levels in other price and

demand scenarios in addition to those described above, particularly if these

scenarios differ depending on the type of coal reserves, regulatory environment in

the countries or regions where mining occurs, end-use of the entity's products, or

other factors.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

For additional sensitivity analyses, the entity should consider disclosing the

following, per the Task Force on Climate-Related Financial Disclosures (TCFD)

Recommendations Report Figure 8 as well as the Implementing the

Recommendations of the TCFD Report, Section E:

7.1

The alternative scenarios used, including other 2ºC or lower scenarios

7.2

Critical input parameters, assumptions, and analytical choices for the

climate-related scenarios used, particularly as they relate to key areas such

as policy assumptions, energy deployment pathways, technology

pathways, and related timing assumptions

7.3

Time frames used for scenarios, including short-, medium-, and long-term

milestones (e.g., how organisations consider timing of potential future

implications under the scenarios used)

EM-CO-420a.2. Estimated carbon dioxide emissions embedded in proven coal

reserves

The entity shall calculate and disclose an estimate of the carbon dioxide emissions

embedded in its proven coal reserves.

1.1

This estimate applies a factor for potential CO2 only and does not include

an estimate for all potential greenhouse gas emissions because these are

dependent on downstream use (for example, utility electricity generation,

industrial heating and electricity generation, cement production or steel

production).

Estimated potential carbon dioxide emissions from proven coal reserves shall be

calculated according to the following formula, derived from Meinshausen et al:

2.1

E = R × V × C, where:

2.1.1

E are the potential emissions in kilograms of carbon dioxide

(kg CO2)

2.1.2

R are the proven reserves in gigagrams (Gg)

2.1.3

V is the net calorific value in terajoules per gigagram (TJ/Gg)

2.1.4

C is the effective carbon dioxide emission factor in kilograms CO2

per terajoule (kg/TJ)

In the absence of data specific to the entity’s coal reserves, carbon content shall be

calculated using default data for each major type of coal resource published by

the Intergovernmental Panel on Climate Change (IPCC) in its 2006 IPCC Guidelines

for National Greenhouse Gas Inventories.

3.1

The entity shall use default carbon content values per unit of energy listed

in IPCC Table 1.3 Default Values of Carbon Content, Volume 2: Energy,

Chapter 1.

3.2

The entity shall use calorific values per weight of coal resource contained

in IPCC Table 1.2 Default Net Calorific Values (NCVs) and Lower and Upper

Limit of the 95% Confidence Intervals, Volume 2: Energy, Chapter 1.

IFRS S2 INDUSTRY-BASED GUIDANCE

The entity shall use engineering estimates to determine the weight of its coal

reserves in gigagrams.

For other assumptions required to estimate the carbon content of coal reserves,

the entity shall rely on guidance from the IPCC, Greenhouse Gas Protocol, US

Energy Information Agency (EIA) or the International Energy Agency (IEA).

EM-CO-420a.3. Discussion of how price and demand for coal or climate

regulation influence the capital expenditure strategy for exploration, acquisition

and development of assets

The entity shall discuss how projections for price and demand for coal and the

path of air quality and climate regulation influence the entity’s capital

expenditure (CAPEX) strategy.

1.1

This discussion should include the entity’s projections and assumptions

about future coal prices and the likelihood that certain price and demand

scenarios occur.

The entity shall discuss the implications of price and demand scenario planning

(EM-CO-420a.1) and how they may affect decisions to explore, acquire and develop

new reserves.

The entity may discuss factors that materially influence its CAPEX decision

making, which may include:

3.1

How the scope of air quality and climate change regulation—such as

which countries, regions or industries are likely to be impacted—may

influence where the entity focuses its exploration and development

3.2

Its view of the alignment between the time horizon during which price

and demand for coal may be affected by climate regulation and time

horizons for returns on capital expenditures on reserves

3.3

How the structure of climate regulations—a carbon tax versus cap-and-

trade—may differently affect price and demand, and thus the entity’s

capital expenditure decision making

The entity may discuss how these trends affect decision-making in the context of

the various types of reserve expenditures, including development of assets,

acquisition of properties with proven reserves, acquisition of properties with

unproven resources and exploration activities.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Volume 8—Construction Materials

Industry Description

Construction Materials entities have global operations and produce construction

materials for sale to construction entities or wholesale distributors. These primarily

include cement and aggregates, but also glass, plastic materials, insulation, bricks and

roofing material. Materials producers operate their own quarries, mining crushed stone

or sand and gravel. They may also purchase raw materials from the mining and

petroleum industries.

Note: Entities producing wood-building products are included the Building Products &

Furnishings (CG-BF) industry, Forestry Management industry (RR-FM), and Pulp & Paper

Products industry (RR-PP) under the Sustainable Industry Classification System (SICS) and

are not included in the Construction Materials standard.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Greenhouse

Gas

Emissions

Gross global Scope 1 emissions,

percentage covered under emissions-

limiting regulations

Quantitative

Metric tons (t)

CO₂-e,

Percentage

(%)

EM-CM-110a.1

Discussion of long- and short-term

strategy or plan to manage Scope 1

emissions, emissions reduction targets,

and an analysis of performance against

those targets

Discussion

and Analysis

n/a

EM-CM-110a.2

Air Quality

Air emissions of the following pollutants:

(1) NOx (excluding N2O), (2) SOx,

(3) particulate matter (PM10),

(4) dioxins/furans, (5) volatile organic

compounds (VOCs), (6) polycyclic

aromatic hydrocarbons (PAHs) and

(7) heavy metals

Quantitative

Metric tons (t)

EM-CM-120a.1

Energy

Management

(1) Total energy consumed,

(2) percentage grid electricity,

(3) percentage alternative and

(4) percentage renewable

Quantitative

Gigajoules

(GJ),

Percentage

(%)

EM-CM-130a.1

Water

Management

(1) Total water withdrawn, (2) total water

consumed; percentage of each in

regions with High or Extremely High

Baseline Water Stress

Quantitative

Thousand

cubic metres

(m³),

Percentage

(%)

EM-CM-140a.1

Waste

Management

Amount of waste generated, percentage

hazardous and percentage recycled

Quantitative

Metric tons (t),

Percentage

(%)

EM-CM-150a.1

continued...

IFRS S2 INDUSTRY-BASED GUIDANCE

...continued

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Product

Innovation

Percentage of products that qualify for

credits in sustainable building design

and construction certifications

Quantitative

Percentage

(%) by annual

sales revenue

EM-CM-410a.1

Total addressable market and share of

market for products that reduce energy,

water or material impacts during usage

or production

Quantitative

Presentation

currency,

Percentage

(%)

EM-CM-410a.2

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Production by major product line 8

Quantitative

Metric tons (t)

EM-CM-000.A

Greenhouse Gas Emissions

Topic Summary

The production of construction materials, particularly cement, generates significant

direct greenhouse gas (GHG) emissions from on-site fuel combustion and chemical

processes. The industry has achieved efficiency gains in reducing emissions per ton of

materials produced. At the same time, increasing production is associated with

increasing absolute emissions from cement production. The production of construction

materials remains carbon-intensive relative to other industries, exposing the industry to

higher operating and capital expenditures from emissions regulations. Strategies to

reduce GHG emissions include energy efficiency, use of alternative and renewable fuels,

carbon sequestration and clinker substitution. Operational efficiencies can be achieved

through the cost-effective reduction of GHG emissions. Such efficiencies can mitigate the

potential financial impact of increased fuel costs as well as direct emissions from

regulations that limit—or put a price on—GHG emissions.

Metrics

EM-CM-110a.1. Gross global Scope 1 emissions, percentage covered under

emissions-limiting regulations

The entity shall disclose its gross global Scope 1 greenhouse gas (GHG) emissions

to the atmosphere of the seven GHGs covered under the Kyoto Protocol—carbon

dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),

perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3).

Note to EM-CM-000.A – Determination of major product line (e.g., cement and aggregates,

composites, roofing materials, fibreglass, brick, and tile, or others) should be based on revenue

generation, and may include a category of “other” construction materials products that

combines multiple smaller revenue streams.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

1.1

Emissions of all GHGs shall be consolidated and disclosed in metric tons of

carbon dioxide equivalent (CO2-e) and calculated in accordance with

published 100-year time horizon global warming potential (GWP) values.

To date, the preferred source for GWP values is the Intergovernmental

Panel on Climate Change (IPCC) Fifth Assessment Report (2014).

1.2

Gross emissions are GHGs emitted into the atmosphere before accounting

for offsets, credits or other similar mechanisms that have reduced or

compensated for emissions.

Scope 1 emissions are defined and shall be calculated according to the

methodology contained in The Greenhouse Gas Protocol: A Corporate Accounting and

Reporting Standard (GHG Protocol), Revised Edition, March 2004, published by the

World Resources Institute and the World Business Council on Sustainable

Development (WRI/WBCSD).

2.1

These emissions include direct emissions of GHGs from stationary or

mobile sources that include production facilities, office buildings and

product transportation (marine, road and rail).

2.2

Acceptable calculation methodologies include those that conform to the

GHG Protocol as the base reference, but provide additional guidance, such

as industry- or region-specific guidance. Examples include:

2.2.1

GHG Reporting Guidance for the Aerospace Industry published by the

International Aerospace Environmental Group (IAEG)

2.2.2

Greenhouse Gas Inventory Guidance: Direct Emissions from Stationary

Combustion Sources published by the US Environmental Protection

Agency (EPA)

2.2.3

India GHG Inventory Program

2.2.4

ISO 14064-1

2.2.5

Petroleum Industry Guidelines for reporting GHG emissions, 2nd edition,

2011, published by IPIECA

2.2.6

Protocol for the quantification of greenhouse gas emissions from waste

management

activities

published

Entreprises

pour

l’Environnement (EpE)

2.3

GHG emission data shall be consolidated according to the approach with

which the entity consolidates its financial reporting data, which is

generally aligned with the ‘financial control’ approach defined by the GHG

Protocol and the approach provided by the Climate Disclosure Standards

Board (CDSB) that is described in REQ-07, ‘Organisational boundary,’ of the

CDSB Framework for reporting environmental and social information.

The entity shall disclose the percentage of its gross global Scope 1 GHG emissions

covered under an emissions-limiting regulation or programme intended to limit

or reduce emissions directly, such as cap-and-trade schemes, carbon tax/fee

systems, and other emissions control (for example, command-and-control

approach) and permit-based mechanisms.

IFRS S2 INDUSTRY-BASED GUIDANCE

3.1

Examples of emissions-limiting regulations include:

3.1.1

California Cap-and-Trade (California Global Warming Solutions Act)

3.1.2

European Union Emissions Trading Scheme (EU ETS)

3.1.3

Quebec Cap-and-Trade (Quebec Environment Quality Act)

3.2

The percentage shall be calculated as the total amount of gross global

Scope 1 GHG emissions (CO2-e) covered under emissions-limiting

regulations divided by the total amount of gross global Scope 1 GHG

emissions (CO2-e).

3.2.1

For emissions subject to more than one emissions-limiting

regulation, the entity shall not account for those emissions more

than once.

3.3

The scope of emissions-limiting regulations excludes emissions covered

under voluntary emissions-limiting regulations (for example, voluntary

trading systems), as well as reporting-based regulations.

The entity may discuss any change in its emissions from the previous reporting

period, including whether the change was because of emissions reductions,

divestment, acquisition, mergers, changes in output or changes in calculation

methodology.

In the case that current reporting of GHG emissions to the CDP or other entity

(for example, a national regulatory disclosure programme) differs in terms of the

scope and consolidation approach used, the entity may disclose those emissions.

However, primary disclosure shall be according to the guidelines described above.

The entity may discuss the calculation methodology for its emissions disclosure,

such as if data are from continuous emissions monitoring systems (CEMS),

engineering calculations or mass balance calculations.

EM-CM-110a.2. Discussion of long- and short-term strategy or plan to manage

Scope 1 emissions, emissions reduction targets, and an analysis of performance

against those targets

The entity shall discuss its long- and short-term strategy or plan to manage its

Scope 1 greenhouse gas (GHG) emissions.

1.1

Scope 1 emissions are defined and shall be calculated according to the

methodology contained in The Greenhouse Gas Protocol: A Corporate Accounting

and Reporting Standard (GHG Protocol), Revised Edition, March 2004,

published by the World Resources Institute and the World Business

Council on Sustainable Development (WRI/WBCSD).

1.2

The scope of GHG emissions includes the seven GHGs covered under the

Kyoto Protocol—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),

hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride

(SF6), and nitrogen trifluoride (NF3).

The entity shall discuss its emission reduction target(s) and analyse its

performance against the target(s), including, if relevant:

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

2.1

The scope of the emission reduction target (for example, the percentage of

total emissions to which the target is applicable);

2.2

Whether the target is absolute or intensity-based, and the metric

denominator if it is an intensity-based target;

2.3

The percentage reduction against the base year, with the base year

representing the first year against which emissions are evaluated towards

the achievement of the target;

2.4

The time lines for the reduction activity, including the start year, the

target year and the base year;

2.5

The mechanism(s) for achieving the target; and

2.6

Any circumstances in which the target or base year emissions have been,

or may be, recalculated retrospectively or the target or base year has been

reset.

The entity shall discuss the activities and investments required to achieve the

plans or targets, and any risks or limiting factors that might affect achievement of

the plans or targets.

The entity shall discuss the scope of its strategies, plans or reduction targets, such

as whether they pertain differently to different business units, geographies or

emissions sources.

The entity shall discuss whether its strategies, plans, or reduction targets are

related to, or associated with, emissions limiting or emissions reporting-based

programmes or regulations (for example, the EU Emissions Trading Scheme,

Quebec Cap-and-Trade System, California Cap-and-Trade Program), including

regional, national, international or sectoral programmes.

Disclosure of strategies, plans or reduction targets shall be limited to activities

that were ongoing (active) or reached completion during the reporting period.

Air Quality

Topic Summary

On-site fuel combustion and production processes in the Construction Materials industry

emit criteria air pollutants and hazardous chemicals, including small quantities of

organic compounds and heavy metals. Emissions of particular concern include nitrogen

oxides, sulphur dioxides, particulate matter, heavy metals (for example, mercury),

dioxins and volatile organic compounds, among others. These air emissions can have

significant, localised human health and environmental impacts. Financial impacts

resulting from air emissions will vary depending on the specific location of operations

and the applicable air emissions regulations, but they could include higher operating or

capital expenditures and regulatory or legal penalties. Active management of the issue—

through technological and process improvements—may allow entities to limit the impact

of regulations and benefit from operational efficiencies that could lead to a lower cost

structure over time.

IFRS S2 INDUSTRY-BASED GUIDANCE

Metrics

EM-CM-120a.1 Air emissions of the following pollutants: (1) NOx (excluding N2O),

(2) SOx, (3) particulate matter (PM10), (4) dioxins/furans, (5) volatile organic

compounds (VOCs), (6) polycyclic aromatic hydrocarbons (PAHs) and (7) heavy

metals

The entity shall disclose its emissions of air pollutants, in metric tons per

pollutant, released into the atmosphere.

1.1

The scope of disclosure includes air pollutants associated with the entity’s

direct air emissions resulting from all the entity’s activities and sources of

emissions, which may include stationary and mobile sources, production

facilities, office buildings and transportation fleets.

The entity shall disclose its emissions of (1) oxides of nitrogen (NOx), reported as

NOx.

2.1

The scope of NOx includes NO and NO2 but excludes N2O.

The entity shall disclose its emissions of (2) oxides of sulphur (SOx), reported as

SOx.

3.1

The scope of SOx includes SO2 and SO3.

The entity shall disclose its emissions of (3) particulate matter 10 micrometres or

less in diameter (PM10), reported as PM10.

4.1

PM10 is defined as any airborne finely divided solid or liquid material with

an aerodynamic diameter less than or equal to a nominal 10 micrometres.

The entity shall disclose its emissions of (4) dioxins/furans.

5.1

Dioxins/furans include, but are not limited to the sum of the 17 congeners

polychlorinated

dibenzodioxins

(PCDDs)

and

polychlorinated

dibenzofurans (PCDFs) that contain chlorine

The entity shall disclose its emissions of (5) non-methane volatile organic

compounds (VOCs).

6.1

VOCs are defined as any compound of carbon, excluding carbon monoxide,

carbon dioxide, carbonic acid, metallic carbides or carbonates, ammonium

carbonate and methane, that participates in atmospheric photochemical

reactions, except those designated under applicable jurisdictional law or

regulation as having negligible photochemical reactivity.

6.1.1

If applicable regulatory definitions of VOCs may conflict with this

definition, the entity may define VOCs in accordance with the

applicable regulatory definition.

The entity shall disclose its emissions of (6) polycyclic aromatic hydrocarbons

(PAHs).

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

7.1

PAHs are a large group of organic compounds containing two or more

fused aromatic (benzene) rings. A main source of emission is the

incomplete combustion or pyrolysis of organic material.

7.2

PAHs include those listed in the World Health Organization’s 2021 Human

health effects of polycyclic aromatic hydrocarbons as ambient air pollutants: report of

the Working Group on Polycyclic Aromatic Hydrocarbons of the Joint Task Force on

the Health Aspects of Air Pollution.

The entity shall disclose its emissions of (7) heavy metals.

8.1

The scope of heavy metals includes lead (Pb), mercury (Hg), and cadmium

(Cd).

The entity may discuss the calculation methodology for its emissions disclosure,

such as whether data are from continuous emissions monitoring systems (CEMS),

engineering calculations or mass balance calculations.

Energy Management

Topic Summary

The production of construction materials requires significant energy, sourced primarily

from direct fossil fuel combustion as well as from purchased electricity. Energy-intense

production has implications for climate change, and electricity purchases from the grid

can create indirect Scope 2 emissions. Construction materials entities also use alternative

fuels for kilns, such as scrap tyres and waste oil—often waste generated by other

industries. If properly managed, these can lower energy costs and greenhouse gas (GHG)

emissions. However, potentially negative impacts could occur, such as releases of

harmful air pollutants that entities need to minimise to obtain net benefits from using

such fuels. Decisions about use of alternative fuels, renewable energy and on-site

generation of electricity (versus purchases from the grid) can be important in influencing

both the costs and reliability of energy supply. Affordable, easily accessible and reliable

energy is an important competitive factor in this industry, with purchased fuels and

electricity accounting for a significant proportion of total production costs. How a

construction materials entity manages energy efficiency, reliance on different types of

energy and associated sustainability risks, and access to alternative sources of energy may

influence its profitability.

Metrics

EM-CM-130a.1. (1) Total energy consumed, (2) percentage grid electricity,

(3) percentage alternative and (4) percentage renewable

The entity shall disclose (1) the total amount of energy it consumed as an

aggregate figure, in gigajoules (GJ).

1.1

The scope of energy consumption includes energy from all sources,

including energy purchased from external sources and energy produced by

the entity itself (self-generated). For example, direct fuel usage, purchased

electricity, and heating, cooling and steam energy are all included within

the scope of energy consumption.

IFRS S2 INDUSTRY-BASED GUIDANCE

1.2

The scope of energy consumption includes only energy directly consumed

by the entity during the reporting period.

1.3

In calculating energy consumption from fuels and biofuels, the entity shall

use higher heating values (HHV), also known as gross calorific values

(GCV), which are measured directly or taken from the Intergovernmental

Panel on Climate Change (IPCC).

The entity shall disclose (2) the percentage of energy it consumed that was

supplied from grid electricity.

2.1

The percentage shall be calculated as purchased grid electricity

consumption divided by total energy consumption.

The entity shall disclose (3) the percentage of energy it consumed from alternative

sources, in terms of its energy content.

3.1

Alternative sources of energy include used tyres, spent solvents and waste

oils, processed municipal solid waste, household wastes, agricultural

wastes such as rice, peanut shells and coffee husks, animal meal and

sewage sludge.

The entity shall disclose (4) the percentage of energy it consumed that was

renewable energy.

4.1

Renewable energy is defined as energy from sources that are replenished

at a rate greater than or equal to their rate of depletion, such as

geothermal, wind, solar, hydro and biomass.

4.2

The percentage shall be calculated as renewable energy consumption

divided by total energy consumption.

4.3

The scope of renewable energy includes renewable fuel the entity

consumed, renewable energy the entity directly produced and renewable

energy the entity purchased, if purchased through a renewable power

purchase agreement (PPA) that explicitly includes renewable energy

certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy

Certified utility or supplier programme, or other green power products

that explicitly include RECs or GOs, or for which Green‐e Energy Certified

RECs are paired with grid electricity.

4.3.1

For any renewable electricity generated on-site, any RECs and GOs

shall be retained (not sold) and retired or cancelled on behalf of the

entity for the entity to claim them as renewable energy.

4.3.2

For renewable PPAs and green power products, the agreement shall

explicitly include and convey that RECs and GOs be retained or

replaced and retired or cancelled on behalf of the entity for the

entity to claim them as renewable energy.

4.3.3

The renewable portion of the electricity grid mix that is outside of

the control or influence of the entity is excluded from the scope of

renewable energy.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

4.4

For the purposes of this disclosure, the scope of renewable energy from

biomass sources is limited to materials certified to a third-party standard

(for example, Forest Stewardship Council, Sustainable Forest Initiative,

Programme for the Endorsement of Forest Certification or American Tree

Farm System), materials considered eligible sources of supply according to

the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or

Green-e regional standards, or materials eligible for an applicable

jurisdictional renewable portfolio standard.

The entity shall apply conversion factors consistently for all data reported under

this disclosure, such as the use of HHVs for fuel usage (including biofuels) and

conversion of kilowatt hours (kWh) to GJ (for energy data including electricity

from solar or wind energy).

Water Management

Topic Summary

Construction materials production requires substantial volumes of water. Entities face

operational, regulatory and reputational risks associated with water scarcity, costs of

water acquisition, regulations on effluents or amount of water used, and competition

with local communities and other industries for limited water resources. Risks are likely

to be higher in regions of water scarcity because of potential water availability

constraints and price volatility. Entities unable to secure a stable water supply could face

production disruptions, while rising water prices could directly increase production costs.

Consequently, the adoption of technologies and processes that reduce water consumption

could lower operating risks and costs for entities by minimising the impact of

regulations, water supply shortages and community-related disruptions on entity

operations.

Metrics

EM-CM-140a.1. (1) Total water withdrawn, (2) total water consumed; percentage

of each in regions with High or Extremely High Baseline Water Stress

The entity shall disclose the amount of water, in thousands of cubic metres,

withdrawn from all sources.

1.1

Water sources include surface water (including water from wetlands,

rivers, lakes and oceans), groundwater, rainwater collected directly and

stored by the entity, and water and wastewater obtained from municipal

water supplies, water utilities or other entities.

The entity may disclose portions of its supply by source if, for example, significant

portions of withdrawals are from non-freshwater sources.

2.1

Fresh water may be defined according to the local laws and regulations

where the entity operates. If no legal definition exists, fresh water shall be

considered to be water that has less than 1,000 parts per million of

dissolved solids.

IFRS S2 INDUSTRY-BASED GUIDANCE

2.2

Water obtained from a water utility in compliance with jurisdictional

drinking water regulations can be assumed to meet the definition of fresh

water.

The entity shall disclose the amount of water, in thousands of cubic metres,

consumed in its operations.

3.1

Water consumption is defined as:

3.1.1

Water that evaporates during withdrawal, use and discharge

3.1.2

Water that is directly or indirectly incorporated into the entity’s

product or service

3.1.3

Water that does not otherwise return to the same catchment area

from which it was withdrawn, such as water returned to another

catchment area or the sea

The entity shall analyse all its operations for water risks and identify activities

that withdraw and consume water in locations with High (40–80%) or Extremely

High (>80%) Baseline Water Stress as classified by the World Resources Institute’s

(WRI) Water Risk Atlas tool, Aqueduct.

The entity shall disclose water withdrawn in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water withdrawn.

The entity shall disclose water consumed in locations with High or Extremely

High Baseline Water Stress as a percentage of the total water consumed.

Waste Management

Topic Summary

Construction materials production recycling rates are high. However, waste from

production processes, pollution control devices and from hazardous waste management

activities present a regulatory risk and can increase operating costs. Cement kiln dust

(CKD)—consisting of fine-grained, solid, highly alkaline waste removed from cement kiln

exhaust gas by air pollution control devices—is the most significant waste category in the

industry. Regulatory risk remains high from evolving environmental laws. Entities that

reduce waste streams—hazardous waste streams in particular—and recycle by-products,

can reduce regulatory and litigation risks and costs.

Metrics

EM-CM-150a.1. Amount of waste generated, percentage hazardous and

percentage recycled

The entity shall disclose the amount of waste generated in metric tons.

1.1

Waste is defined as anything for which the entity has no further use, and

which is discarded or released to the environment.

1.2

The scope includes slags, dusts, sludges, used oil and other solid wastes

that meet the above definition.

1.3

The scope excludes gaseous waste.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

The entity shall disclose the percentage of waste generated that was hazardous.

2.1

The percentage of hazardous waste shall be calculated as the weight

hazardous waste as defined in accordance with the applicable

jurisdictional, legal or regulatory framework where the waste was

generated divided by the total weight of waste material.

2.2

Hazardous waste generally displays the following characteristics:

ignitability, corrosivity, reactivity or toxicity.

2.3

The entity may use United Nations Environmental Programme (UNEP)

Basel Convention on the Control of Transboundary Movements of Hazardous Wastes

and Their Disposal for the purposes of defining hazardous waste for

operations located in jurisdictions that lack applicable legal or regulatory

definitions.

The entity shall disclose the percentage of waste generated that was recycled.

3.1

The percentage recycled shall be calculated as the weight of waste material

reused, plus the weight recycled or remanufactured (through treatment or

processing) by the entity, plus the amount sent externally for further

recycling, divided by the total weight of waste material.

3.1.1

Reused materials are defined as those recovered products or

components of products used for the same purpose for which they

were conceived.

3.1.2

Recycled and remanufactured materials are defined as waste

materials that have been reprocessed or treated by means of

production or manufacturing processes and made into a final

product or made into a component for incorporation into a

product.

3.1.3

The scope of recycled and remanufactured products includes

primary recycled materials, co-products (outputs of equal value to

primary recycled materials) and by-products (outputs of lesser

value to primary recycled materials).

3.1.4

Portions of products and materials discarded in landfills are not

considered recycled; only the portions of products directly

incorporated into new products, co-products or by-products shall

be included in the percentage recycled.

3.1.5

Materials sent for further recycling include those materials

transferred to a third party for the expressed purpose of reuse,

recycling or refurbishment.

3.2

Materials incinerated, including for energy recovery, shall not be

considered within the scope of recycled materials.

3.2.1

Energy recovery is defined as the use of combustible waste to

generate energy through direct incineration, with or without other

waste, but with recovery of the heat.

IFRS S2 INDUSTRY-BASED GUIDANCE

3.2.2

The entity may separately disclose the percentage of hazardous

waste generated that was incinerated.

The entity shall disclose the legal or regulatory framework(s) used to define waste,

hazardous waste and recycled hazardous waste.

Product Innovation

Topic Summary

Innovations in building materials are an essential component in the growth of

sustainable construction. Consumer and regulatory trends are driving adoption of

sustainable building materials and processes that are more resource efficient and can

reduce health impacts of buildings throughout their lifecycle. This is creating new

business drivers for construction materials entities, with an opportunity to increase

revenue. Furthermore, some new products require less energy to produce, or use largely

recycled inputs, reducing production costs. Therefore, sustainable construction materials

can contribute to an entity’s long-term growth and competitiveness.

Metrics

EM-CM-410a.1 Percentage of products that qualify for credits in sustainable

building design and construction certifications

The entity shall calculate the percentage as the revenue during the reporting

period from products that qualify for credits in recognised sustainable design and

construction certifications divided by the total revenue from building products.

1.1

The scope of products excludes raw or intermediate materials that would

require additional manufacturing before being incorporated into a

building; the entity shall exclude these products from the numerator and

denominator of the calculation.

Recognised sustainable building design and construction certifications and

guidelines include BREEAM® (BRE Global), Green Globes® (Green Building

Initiative), LEED® (US Green Building Council) and ICC-700 National Green

Building Standard® (National Association of Home Builders).9

2.1

If the entity’s products can be used to obtain credits in certifications other

than those described above, it shall provide the name of the certification

and evidence of why it is equal to or more rigorous than those standards

listed here.

The entity may disclose and discuss which specific products contribute to

sustainable building practices, as well as its plans to address market demand for

these types of products.

The ISSB is not affiliated with any of the standards or organisations listed, and listing should not

be taken as an endorsement of any standard or organisation. Listing of standards is not meant to

imply that standards are identical in scope, underlying requirements or criteria, or that

standards are interchangeable.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

EM-CM-410a.2. Total addressable market and share of market for products that

reduce energy, water or material impacts during usage or production

The entity shall provide an estimate of the total addressable market for products

that show reduced environmental impacts at various lifecycle stages, including

during material sourcing, manufacturing and product usage (hereafter, ‘reduced

environmental impact products’).

1.1

Total addressable market is defined as potential revenue should the entity

capture 100% of the market share of the product category (for example,

the global market for reduced environmental impact products).

The scope of products includes those:

2.1

With product attributes that reduce energy consumption or increase

energy efficiency for users, such as by providing improved insulation

compared to typical products

2.2

With process or product attributes that reduce the amount of water

required in manufacturing, during product assembly or product usage

2.3

That use secondary or recycled materials in place of virgin materials such

that upstream impacts are reduced

2.4

Made with design innovations that reduce carbon emissions during

manufacturing, such as use of renewable fuels, energy efficiency

improvements or the use of materials requiring less processing

If a significant difference exists between the total addressable market and the

market that the entity can serve through its existing or planned capabilities, sales

channels or products (the serviceable available market), then the entity should

disclose this information.

The entity shall disclose the share of the total addressable market for reduced

environmental impact products it currently captures with its products.

4.1

Market share shall be calculated as revenue from these products divided

by the size of the total addressable market.

The entity may provide a projection of growth of this market, where the projected

addressable market is represented—based on a reasonable set of assumptions

about changes in market conditions—as a percentage of year-on-year growth or as

an estimate of the market size after a defined period (the market size in 10 years).

5.1

The entity may disclose its target three-year market share as a

measurement of targeted growth, where the target is the percentage of the

total addressable market the entity plans to address over a three-year time

horizon.

IFRS S2 INDUSTRY-BASED GUIDANCE

Volume 9—Iron & Steel Producers

Industry Description

The Iron & Steel Producers industry primarily consists of entities producing iron and

steel in mills and foundries. The steel producers segment produces iron and steel

products from its own mills. These products include flat-rolled sheets, tin plates, pipes,

tubes, and products made of stainless steel, titanium and high alloy steels. Iron and steel

foundries, which cast various products, typically purchase iron and steel from other

entities. The industry also includes metal service centres and other metal merchant

wholesalers, which distribute, import or export ferrous products. Though entities are

developing alternative processes, steel production primarily relies on two primary

methods: the basic oxygen furnace (BOF), which uses iron ore as an input, and the

electric arc furnace (EAF), which uses scrap steel. Many entities in the industry operate

on an international scale. Note: With a few exceptions, most entities do not mine their

own ore to manufacture steel and iron products. There exists a separate standard for the

Metals & Mining (EM-MM) industry.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Greenhouse

Gas

Emissions

Gross global Scope 1 emissions,

percentage covered under emissions-

limiting regulations

Quantitative

Metric tons (t)

CO₂-e,

Percentage

(%)

EM-IS-110a.1

Discussion of long- and short-term

strategy or plan to manage Scope 1

emissions, emissions reduction targets,

and an analysis of performance against

those targets

Discussion

and Analysis

n/a

EM-IS-110a.2

Energy

Management

(1) Total energy consumed,

(2) percentage grid electricity and

(3) percentage renewable

Quantitative

Gigajoules

(GJ),

Percentage

(%)

EM-IS-130a.1

(1) Total fuel consumed, (2) percentage

coal, (3) percentage natural gas and

(4) percentage renewable

Quantitative

Gigajoules

(GJ),

Percentage

(%)

EM-IS-130a.2

Water

Management

(1) Total water withdrawn, (2) total water

consumed; percentage of each in

regions with High or Extremely High

Baseline Water Stress

Quantitative

Thousand

cubic metres

(m³),

Percentage

(%)

EM-IS-140a.1

Supply Chain

Management

Discussion of the process for managing

iron ore or coking coal sourcing risks

arising from environmental and social

issues

Discussion

and Analysis

n/a

EM-IS-430a.1

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Raw steel production, percentage from: (1) basic oxygen

furnace processes, (2) electric arc furnace processes

Quantitative

Metric tons (t),

Percentage

(%)

EM-IS-000.A

Total iron ore production 10

Quantitative

Metric tons (t)

EM-IS-000.B

Total coking coal production 11

Quantitative

Metric tons (t)

EM-IS-000.C

Greenhouse Gas Emissions

Topic Summary

Iron and steel production generates significant direct greenhouse gas (GHG) emissions,

primarily carbon dioxide and methane, from production processes and on-site fuel

combustion. Although technological improvements have reduced the GHG emissions per

ton of steel produced, steel production remains carbon-intensive compared to other

industries. Regulatory efforts to reduce GHG emissions in response to the risks posed by

climate change may result in additional regulatory compliance costs and risks for iron

and steel entities because of climate change mitigation policies. Entities can achieve

operational efficiencies through the cost-effective reduction of GHG emissions. Capturing

such efficiencies can mitigate the potential financial effects of increased fuel costs from

regulations that limit—or put a price on—GHG emissions.

Metrics

EM-IS-110a.1. Gross global Scope 1 emissions, percentage covered under

emissions-limiting regulations

The entity shall disclose its gross global Scope 1 greenhouse gas (GHG) emissions

to the atmosphere of the seven GHGs covered under the Kyoto Protocol—carbon

dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),

perfluorocarbons (PFCs), sulphur hexafluoride (SF6), and nitrogen trifluoride (NF3).

1.1

Emissions of all GHGs shall be consolidated and disclosed in metric tons of

carbon dioxide equivalent (CO2-e) and calculated in accordance with

published 100-year time horizon global warming potential (GWP) values.

To date, the preferred source for GWP values is the Intergovernmental

Panel on Climate Change (IPCC) Fifth Assessment Report (2014).

1.2

Gross emissions are GHGs emitted into the atmosphere before accounting

for offsets, credits or other similar mechanisms that have reduced or

compensated for emissions.

Note to EM-IS-000.B – The scope of production includes iron ore consumed internally and that

which is made available for sale.

Note to EM-IS-000.C – The scope of production includes coking coal consumed internally and

that which is made available for sale.

IFRS S2 INDUSTRY-BASED GUIDANCE

Scope 1 emissions are defined and shall be calculated according to the

methodology contained in The Greenhouse Gas Protocol: A Corporate Accounting and

Reporting Standard (GHG Protocol), Revised Edition, March 2004, published by the

World Resources Institute and the World Business Council on Sustainable

Development (WRI/WBCSD).

2.1

These emissions include direct emissions of GHGs from stationary or

mobile sources that include production facilities, office buildings and

product transportation (marine, road and rail).

2.2

Acceptable calculation methodologies include those that conform to the

GHG Protocol as the base reference, but provide additional guidance, such

as industry- or region-specific guidance. Examples include:

2.2.1

GHG Reporting Guidance for the Aerospace Industry published by the

International Aerospace Environmental Group (IAEG)

2.2.2

Greenhouse Gas Inventory Guidance: Direct Emissions from Stationary

Combustion Sources published by the U.S. Environmental Protection