ifrs-s2-ibg-volume-43-pulp-and-paper-products-part-b

Industry-based Guidance on implementing

Climate-related Disclosures

Volume 43—Pulp & Paper Products

June 2023

IFRS S2

IFRS

® Sustainability Disclosure Standard

International Sustainability Standards Board

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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IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

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.

IFRS S2 INDUSTRY-BASED GUIDANCE

Volume 43—Pulp & Paper Products

Industry Description

Pulp & Paper Products industry entities manufacture a range of wood pulp and paper

products, including pulp fibre, paper packaging and sanitary paper, office paper,

newsprint, and paper for industrial applications. Entities in the industry typically

function as business-to-business entities and may have operations in multiple countries.

Although some integrated entities own or manage timber tracts and are engaged in forest

management, sustainability issues arising from these activities are addressed in the

Forestry Management (RR-FM) industry.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Pulp production

Quantitative

Air-dried

metric tons (t)

RR-PP-000.A

Paper production

Quantitative

Air-dried

metric tons (t)

RR-PP-000.B

Total wood fibre sourced 73

Quantitative

Metric tons (t)

RR-PP-000.C

Greenhouse Gas Emissions

Topic Summary

The manufacturing of pulp and paper products generates direct greenhouse gas (GHG)

emissions associated with the combustion of fossil fuels and biomass in stationary and

mobile engines, cogeneration boilers, and other processing equipment. Entities in this

industry also typically use significant amounts of carbon-neutral biomass for their energy

needs, the use of which may reduce the costs associated with purchasing fossil fuels, as

well as mitigate regulatory risk associated with carbon emissions. Emissions associated

with fossil fuel sources may add regulatory compliance costs, depending on the

magnitude of emissions and the prevailing emissions regulations. Entities that cost-

effectively manage GHG emissions through greater energy efficiency, alternative fuels

use or manufacturing process improvements may benefit from improved operating

efficiency and reduced regulatory compliance costs.

Metrics

RR-PP-110a.1. Gross global Scope 1 emissions

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 RR-PP-000.C – The scope of wood-fibre-based raw materials includes all inputs that are

processed to be sold as a finished good, including recycled raw materials, virgin raw materials,

and goods that will be consumed directly in the production process and excluding biomass for

energy use.

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

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:

2.1.1

GHG Reporting Guidance for the Aerospace Industry published by the

International Aerospace Environmental Group (IAEG)

2.1.2

Greenhouse Gas Inventory Guidance: Direct Emissions from Stationary

Combustion Sources published by the U.S. Environmental Protection

Agency (EPA)

2.1.3

India GHG Inventory Program

2.1.4

ISO 14064-1

2.1.5

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

2011, published by IPIECA

2.1.6

Protocol for the quantification of greenhouse gas emissions from waste

management

activities

published

Entreprises

pour

l’Environnement (EpE)

2.2

GHG emissions data shall be consolidated and disclosed according to the

approach with which the entity consolidates its financial reporting data,

which generally is aligned with the ‘financial control’ approach defined by

the GHG Protocol, and the approach published 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 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.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

RR-PP-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:

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.

IFRS S2 INDUSTRY-BASED GUIDANCE

Energy Management

Topic Summary

Pulp and paper products manufacturing is energy-intensive. In most facilities, entities

generate energy primarily from the combustion of biomass and fossil fuels, although

purchased electricity also may be used in some facilities. Decisions regarding on-site

electricity generation versus sourcing it from the grid, as well as the use of biomass and

other renewable energy, may create trade-offs related to the energy supply’s cost and

reliability for operations and the extent of the regulatory risk from Scope 1 or other air

emissions. The way an entity manages energy efficiency, its reliance on varied types of

energy and the associated sustainability risks, and its access to alternative energy sources,

may mitigate the effects of energy cost variability.

Metrics

RR-PP-130a.1. (1) Total energy consumed, (2) percentage grid electricity,

(3) percentage from biomass, (4) percentage from other renewable energy and

(5) total self-generated energy

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

figure, in gigajoules (GJ).

1.1

The scope of energy consumption includes energy from all sources,

including energy purchased from sources external to the entity and energy

produced by the entity itself (self-generated). For example, direct fuel use,

purchased electricity, and heating, cooling and steam energy all are

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 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 consumed that was supplied

by biomass.

3.1

The percentage shall be calculated as biomass energy consumption divided

by total energy consumption.

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

sources is limited to:

4.1

Energy from biomass sources that meets at least one of the following

criteria:

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

4.1.1

Certification 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)

4.1.2

Classification as an ‘eligible renewable’ according to the Green-e

Energy National Standard Version 2.5 (2014)

4.1.3

Eligibility for a jurisdictional Renewable Portfolio Standard

The entity shall disclose (4) the percentage of energy it consumed that was

renewable energy, excluding biomass energy.

5.1

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.

5.2

The percentage shall be calculated as renewable energy consumption

divided by total energy consumption.

5.3

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.

5.3.1

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.

5.3.2

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.

5.3.3

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.

The entity shall disclose (5) the amount of energy self-generated by the entity as

an aggregate figure, in gigajoules (GJ).

6.1

The entity may disclose the amount of self-generated energy sold to an

electric utility or end-use customer.

6.2

The entity may disclose the amount of self-generated energy that was

renewable energy, where renewable energy is defined above.

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).

IFRS S2 INDUSTRY-BASED GUIDANCE

Note to RR-PP-130a.1

The entity shall describe risks and uncertainties associated with the use of

biomass as an energy source, and it shall describe how it manages those risks.

Risks and uncertainties associated with the use of biomass as an energy source

may include:

2.1

Risks from air emissions (such as oxides of nitrogen and sulphur),

including costs to comply with emissions restrictions and reputational

damage resulting from violations.

2.2

Regulatory risks, including financial effects associated with compliance

with potential biogenic carbon dioxide regulations, or reputational

impacts associated with biomass failing to meet the definition of eligible

renewable energy in a jurisdictional Renewable Portfolio Standard.

2.3

Sourcing risks, including reputational risks associated with a lack of

transparency

about

whether

purchased

biomass

was

sustainably

harvested.

Water Management

Topic Summary

Pulp and paper products manufacturing is typically water-intensive in materials

processing, process cooling and steam generation at on-site energy plants. Entities

require ample, stable water supplies and may produce large volumes of wastewater, the

majority of which is treated and returned to the environment. Process water typically

contains dissolved organic compounds and other solids, underscoring the importance of

water treatment. In addition to water effluents, water availability is an important

consideration because water scarcity may result in higher supply costs, supply

disruptions or tension with local water users. Entities may adopt various strategies to

address water supply and treatment issues, such as cost-effectively enhancing the

recycling of process water, improving production techniques to lower water intensity,

and ensuring compliance with water-effluent regulations.

Metrics

RR-PP-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.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

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.

RR-PP-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

IFRS S2 INDUSTRY-BASED GUIDANCE

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:

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.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

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.

Supply Chain Management

Topic Summary

Pulp and paper products entities source wood and wood fibre from forestry management

entities, paper fibre recyclers and forests that the entities themselves manage. Supply

chain risks include decreased productivity of forestlands because of management

practices or climate change, regulations addressing sustainable forest management, and

reputational effects. To mitigate such risks and satisfy growing customer demand for

sustainably sourced fibre and paper products, manufacturers implement forest

certification and fibre chain-of-custody standards which verify that virgin and recycled

fibre originate from sustainably managed forests. In addition, pulp and paper

manufacturers may face trade-offs from the use of recovered fibre. Products with

recycled content are increasingly in demand, providing a possible avenue for product

differentiation, while using recycled fibre can minimise the need for virgin fibre.

Conversely, manufacturing products with a greater recycled content may increase waste

generation and energy consumption, while recycled fibre can be costlier, given

demand–supply gaps. Therefore, entities may benefit by optimising recycled fibre use to

balance its environmental and economic trade-offs.

IFRS S2 INDUSTRY-BASED GUIDANCE

Metrics

RR-PP-430a.1. Percentage of wood fibre sourced from (1) third-party certified

forestlands and percentage to each standard and (2) meeting other fibre sourcing

standards and percentage to each standard

The entity shall disclose the percentage of total wood-fibre-based materials

sourced from forestlands certified to forest management standards, where:

1.1

Third-party forest management standards are those certifying forests are

harvested in a sustainable manner and ensure 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.

1.2

Third-party forest management certifications may include those promoted

by the following organisations (or the equivalent):

1.2.1

American Tree Farm System (ATFS) (ATFS Certification)

1.2.2

Forest Stewardship Council (FSC) (FSC Forest Management and

Chain of Custody certifications)

1.2.3

Programme for the Endorsement of Forest Certification (PEFC)

(PEFC Chain of Custody certifications)

1.2.4

Forest certification systems endorsed by the PEFC

1.2.5

Sustainable Forest Initiative (SFI) (SFI Forest Management and

Chain of Custody certifications)

1.3

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

sold as a finished good, including recycled raw materials, virgin raw

materials, and goods consumed directly in the production process and

excluding biomass for energy.

The percentage of wood-fibre-based materials from third-party certified

forestlands shall be calculated as the total weight (in air dried metric tons) of the

entity’s wood-fibre-based materials sourced from third-party certified forestlands

divided by the total weight (in air dried metric tons) of wood-fibre-based materials

sourced.

The entity shall disclose the percentage of the total wood-fibre-based materials

from third-party certified forestlands certified to each standard (for example, FSC

Chain of Custody, PEFC Chain of Custody and SFI Chain of Custody).

3.1

The entity shall calculate the percentage of wood-fibre-based materials

certified to each standard as the amount of wood-fibre-based materials

third-party certified to the respective standard divided by the total amount

of wood fibre sourced by the entity.

3.2

If wood-fibre is certified to multiple third-party certifications, the entity

shall include the amount of such fibre in its calculations for each relevant

certification.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

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

sourced from non-third-party certified forestlands but meets other fibre sourcing

standards, including:

4.1

Responsible fibre sourcing standards (for example, SFI Fibre Sourcing

Standard)

4.2

Controlled

wood

standards

(for

example,

FSC

Controlled

Wood

Certification and PEFC Controlled Wood)

4.3

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

material (for example, PEFC Controlled Sources, FSC Recycled Label and

SFI Recycled Label)

4.4

Any other due diligence standards that cover sourcing requirements for

fibre from non-certified forestlands

For fibre from non-certified forestlands that meets multiple fibre sourcing

standards, the entity shall not account for the weight more than once when

calculating the total percentage of fibre from non-certified forestlands that meets

other fibre sourcing standards.

The entity shall disclose the percentage of wood fibre that meets each sourcing

standard (for example, FSC Controlled Wood, SFI Fibre Sourcing Standard and

PEFC Controlled Sources).

6.1

If wood fibre meets multiple sourcing standards, the entity shall include

the amount of such fibre in its calculations for each relevant sourcing

standard.

Note to RR-PP-430a.1

The entity shall discuss its due diligence practices for fibre that is not from

certified forestlands or certified to other fibre sourcing standards and its policies

to verify the forestry management and harvesting practices of suppliers, which

may include codes of conduct, audits or contracts, among others.

The entity shall disclose how it verifies that its non-certified fibre includes criteria

for the following:

2.1

Wood legality

2.2

Wood sourced from areas of protected conservation status or high

biodiversity value

2.3

Logging in or near areas of endangered species habitat

2.4

Logging in or near areas of indigenous peoples’ land

2.5

The forestry management and harvesting practices of suppliers, including

reviews of environmental impact assessments or forestry management

plans

2.6

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

chemicals in forests

IFRS S2 INDUSTRY-BASED GUIDANCE

2.7

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

definition of FSC ‘controlled wood’, or the equivalent

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

corporate, private or federally owned forestlands and whether fibre is grown

domestically or internationally) and the potential risks associated with procuring

fibre from these sources.

RR-PP-430a.2. Amount of recycled and recovered fibre procured

The entity shall disclose the amount of recycled and recovered fibre procured in

metric tons from suppliers as well as recycled and recovered fibre obtained

directly through collection programmes.

Recycled content is defined, consistent with definitions in ISO 14021:1999,

‘Environmental labels and declarations—Self-declared environmental claims (Type

II environmental labelling)’, as the portion, by mass, of recycled or recovered

material in a product or packaging, where only pre-consumer and post-consumer

materials shall be considered as recycled content, and where:

2.1

Recycled material is defined as material reprocessed from recovered (or

reclaimed) material by means of a manufacturing process and made into a

final product or a component for incorporation into a product.

2.2

Recovered material is defined as material that would have otherwise been

discarded as waste or used for energy recovery, but it has instead been

collected and recovered (or reclaimed) as a material input, in lieu of new

primary material, for a recycling or manufacturing process.

2.3

Pre-consumer material is defined as material diverted from the waste

stream during a manufacturing process. Excluded is the reuse of materials

such as rework, regrind or scrap generated in a process and capable of

being reclaimed within the same process that generated them.

2.4

Post-consumer material is defined as material generated by households or

by commercial, industrial and institutional facilities in their role as end-

users of a product that can no longer be used for its intended purpose.

This includes returns of material from the distribution chain.

2.5

Fibre shall be considered recycled or recovered if it meets the SFI

definition of recycled content, the FSC definition of reclaimed material, or

the PEFC definition of recycled wood and fibres.

Note to RR-PP-430a.2

The entity shall discuss how it incorporates environmental lifecycle analyses into

decisions to source recycled and recovered fibre versus virgin fibre.

1.1

An environmental lifecycle trade-off is defined as an environmental

benefit or consequence of choosing to source one type of fibre over

another.

1.1.1

Environmental lifecycle benefits from using recycled and recovered

fibre may include reducing the need for deforestation, reducing

GHG emissions from paper in landfills and reducing landfill waste.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

1.1.2

Environmental lifecycle consequences of using recycled and

recovered fibre can include increased resource consumption and

generation of air emissions during the transportation and

processing of fibre.

The entity shall discuss how lifecycle trade-off assessments are incorporated into

its fibre sourcing decisions, including how the following risks and opportunities

are managed:

2.1

Costs of recycled and recovered materials

2.2

Constraints related to accessing the necessary supply of recycled and

recovered fibre

2.3

Recycling infrastructure needed by the entity or external paper collection

facilities

2.4

Consumer behaviour to improve recovery of paper for recycling

2.5

Virgin wood fibre sourcing risks

2.6

Improving paper recovery rates

2.7

Regulation related to consumer recycling or minimum recycled content

usage

2.8

Quality of fibre needed for products and the intended use of fibre for

product segments

2.9

Product innovation opportunities

2.10

Increased revenue and reputational benefits related to products with

recycled or recovered content

The entity may disclose a breakdown of its recycled and recovered fibre use by

product segment.

IFRS S2 INDUSTRY-BASED GUIDANCE

Columbus Building

7 Westferry Circus

Canary Wharf

London E14 4HD, UK

Tel

+44 (0) 20 7246 6410

Email sustainability_licensing@ifrs.org

ifrs.org

International Financial Reporting Standards®, IFRS Foundation®,

IFRS®, IAS®, IFRIC®, SIC®, IASB®, ISSBTM, IFRS for SMEs®

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