Volume 38—Waste Management

Title: Volume 38—Waste Management

Category: Part B—Industry-based Guidance for IFRS S2

Source: IFRS Foundation (https://www.ifrs.org)

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Year: 2023

Type: Industry

Industry-based Guidance on implementing

Climate-related Disclosures

Volume 38—Waste Management

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 38—Waste Management

Industry Description

Waste Management industry entities collect, store, dispose of, recycle or treat various

forms of waste from residential, commercial and industrial clients. Types of waste

include municipal solid waste, hazardous waste, recyclable materials, and compostable or

organic materials. Major entities commonly are integrated vertically, providing a range of

services from waste collection to landfilling and recycling, while others provide

specialised services such as treating medical and industrial waste. Waste-to-energy

operations are a distinct industry segment. Some industry players also provide

environmental engineering and consulting services, mostly to large industrial clients.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Greenhouse

Gas

Emissions

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Greenhouse

Gas

Emissions

(1) Gross global Scope 1 emissions,

percentage covered under

(2) emissions-limiting regulations and

(3) emissions-reporting regulations Quantitative Metric tons (t) CO₂-e,Percentage (%) IF-WM-110a.1

(1) Total landfill gas generated,

(2) percentage flared and

(3) percentage used for energy Quantitative Million British Thermal Units (MMBtu),Percentage (%) IF-WM-110a.2 Discussion of long- and short-term

Thermal Units (MMBtu),Percentage (%) IF-WM-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 Discussion and Analysis n/a IF-WM-110a.3 Fleet Fuel Management

(1) Fleet fuel consumed, (2) percentage natural gas and (3) percentage renewable Quantitative Gigajoules (GJ),Percentage (%) IF-WM-110b.1 Percentage of alternative fuel vehicles in fleet Quantitative Percentage (%)

(%) IF-WM-110b.1 Percentage of alternative fuel vehicles in fleet Quantitative Percentage (%) IF-WM-110b.2 Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Number of customers by category: (1) municipal,

(2) commercial, (3) industrial, (4) residential, and

(5) other 57 Quantitative Number IF-WM-000.A continued...

57 Note to IF-WM-000.A – The scope of “residential” shall only include those residential customers

57 Note to IF-WM-000.A – The scope of “residential” shall only include those residential customers that have direct contracts with the entity. For the purposes of this disclosure, residential customers serviced through contracts with a municipality shall be considered in the “municipal”

category. The scope of each customer type shall be consistent with the entity’s financial reporting.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 3

...continued

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Vehicle fleet size Quantitative Number IF-WM-000.B Number of: (1) landfills, (2) transfer stations, (3) recycling centres, (4) composting centres, (5) incinerators, and

(6) all other facilities 58 Quantitative Number IF-WM-000.C Total amount of materials managed, by customer category: (1) municipal, (2) commercial, (3) industrial,

(4) residential, and (5) other 59 Quantitative Metric tons (t) IF-WM-000.D Greenhouse Gas Emissions

(4) residential, and (5) other 59 Quantitative Metric tons (t) IF-WM-000.D Greenhouse Gas Emissions Topic Summary Landfills are a significant anthropogenic contributor to global greenhouse gas (GHG) emissions because they generate methane. As a result, regulators frequently require entities to limit landfill gas emissions. Entities can reduce these emissions through a variety of control technologies that require significant capital investments such as

variety of control technologies that require significant capital investments such as landfill gas collection efficiency improvements, control devices and increased methane oxidisation. Entities can capture and combust methane using a flare, an engine or a turbine to reduce the overall toxicity and potency of raw emissions dramatically. Landfill gas capture is particularly important for owners and operators of large landfills that have

gas capture is particularly important for owners and operators of large landfills that have been the focus of regulation. Entities that operate in the waste-to-energy industry segment may reduce waste lifecycle emissions through decreased future emissions from landfills and displaced energy generation, but they face increased Scope 1 emissions from waste-to-energy facilities operations. Overall, GHG emissions pose regulatory risks for the

waste-to-energy facilities operations. Overall, GHG emissions pose regulatory risks for the industry, with potential effects on operational costs and capital expenditures. Entities also may generate revenue through the sale of natural gas and energy from waste-to-

energy facilities, as well as reduce fuel purchases by using processed landfill gas to power operations. Performance on this issue may affect an entity’s ability to secure new permits or renew existing ones, which can affect revenue.

or renew existing ones, which can affect revenue.

Metrics IF-WM-110a.1. (1) Gross global Scope 1 emissions, percentage covered under

(2) emissions-limiting regulations and (3) emissions-reporting regulations 1 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),

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

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

58 Note to IF-WM-000.C – Landfills include landfills that are active and landfills owned by the entity that are closed. The scope of “all other facilities“ excludes corporate offices. The scope of each customer type shall be consistent with the entity’s financial reporting.

each customer type shall be consistent with the entity’s financial reporting.

59 Note to IF-WM-000.D – "Managed” is defined as the handling of discarded materials, whether those materials are treated or not. The scope of “residential” shall only include those residential customers that have direct contracts with the entity. For the purposes of this disclosure,

residential customers serviced through contracts with a municipality shall be considered in the

“municipal” category. The scope of each customer type shall be consistent with the entity’s financial reporting.

IFRS S2 INDUSTRY-BASED GUIDANCE 4© IFRS Foundation

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

for offsets, credits or other similar mechanisms that have reduced or compensated for emissions.

2 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

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

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 by Entreprises pour l’Environnement (EpE)

2.2

GHG emissions data shall be consolidated and disclosed according to the

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.

boundary’, of the CDSB Framework for reporting environmental and social information.

3 The entity shall disclose (2) 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

3.1

Examples of emissions-limiting regulations include:

3.1.1

California Cap-and-Trade (California Global Warming Solutions Act) IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 5

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

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.

4 The entity shall disclose (3) the percentage of its gross global Scope 1 GHG emissions covered under emissions reporting-based regulations.

4.1

Emissions reporting-based regulations are defined as regulations that

4.1

Emissions reporting-based regulations are defined as regulations that demand the disclosure of GHG emissions data to regulators or the public,

but for which no limit, cost, target or controls on the amount of emissions generated exists.

4.2

The percentage shall be calculated as the total amount of gross global Scope 1 GHG emissions (CO2-e) covered under emissions reporting-based regulations divided by the total amount of gross global Scope 1 GHG emissions (CO2-e).

4.2.1

regulations divided by the total amount of gross global Scope 1 GHG emissions (CO2-e).

4.2.1

For emissions subject to more than one emissions reporting-based regulation, the entity shall not account for those emissions more than once.

4.3

The scope of emissions reporting-based regulations does not exclude emissions covered under emissions-limiting regulations.

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

5 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.

6 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.

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

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

7 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 INDUSTRY-BASED GUIDANCE 6© IFRS Foundation

IF-WM-110a.2. (1) Total landfill gas generated, (2) percentage flared and

(3) percentage used for energy 1 The entity shall disclose (1) the total amount, in millions of British Thermal Units (MMBtu), of landfill gas generated from its owned or operated facilities.

1.1

Landfill gas is defined as gas produced because of anaerobic decomposition of waste materials in the landfill.

2 The entity shall disclose (2) the percentage of landfill gas that was flared.

2.1

2 The entity shall disclose (2) the percentage of landfill gas that was flared.

2.1

The percentage shall be calculated as the amount (in MMBtu) of landfill gas that was flared divided by the total amount (in MMBtu) of landfill gas generated.

2.1.1

Flared landfill gas includes gas flared through air injection and is defined as gas that is combusted using an open flame with combustion air provided by uncontrolled ambient air around the flame, or air that is blown into the flare to induce complete

flame, or air that is blown into the flare to induce complete combustion.

3 The entity shall disclose (3) the percentage of landfill gas used for energy.

3.1

The percentage shall be calculated as the amount (in MMBtu) of landfill gas captured and used for energy divided by the total amount (in MMBtu) of landfill gas generated.

3.1.1

Landfill gas used for energy includes gas combusted for use in on-

site energy or heat production, conveyed through pipelines for off-

site combustion, and any other on-site or off-site use as a fuel.

4 The entity shall disclose the methodology used to calculate the amount of landfill gas generated, the percentage flared and the percentage used for energy.

IF-WM-110a.3. 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 1

against those targets 1 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

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).

2 The entity shall discuss how lifecycle GHG emissions factor into Scope 1 emissions management and overall business strategy.

2.1

Relevant aspects to discuss include:

management and overall business strategy.

2.1

Relevant aspects to discuss include:IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 7

2.1.1

The trade-offs between lifecycle emissions and Scope 1 emissions

2.1.2

How such trade-offs are evaluated within the context of the entity’s business strategy and operational areas of focus (for example,

landfill gas management, waste-to-energy, recycling, composting)

2.1.3

The extent to which the trade-offs factor into the entity’s business strategy, including identified areas of opportunity for growth and its capital expenditure strategy

2.1.4

its capital expenditure strategy

2.1.4

Whether the short-term management of Scope 1 emissions or the long-term management of lifecycle emissions is prioritised by the entity

2.1.5

The impact of waste-to-energy (WTE) operations on lifecycle emissions versus Scope 1 emissions

2.2

The entity may disclose related quantitative measures, which may include:

2.2.1

Avoided emissions (for example, Protocol for the quantification of greenhouse gas emissions from waste management activities published by

greenhouse gas emissions from waste management activities published by Entreprises pour l’Environnement)

2.2.2

Estimated future Scope 1 emissions from landfills 3 The entity shall discuss risks and opportunities arising out of lifecycle emissions and Scope 1 emissions, which may include:

3.1

Risks arising from future Scope 1 emissions over the long-term resulting from landfills

3.2

Risks arising from short-term increases in Scope 1 emissions resulting from WTE facilities

3.3

3.2

Risks arising from short-term increases in Scope 1 emissions resulting from WTE facilities

3.3

Opportunities arising from long-term decreases in lifecycle emissions resulting from WTE facilities, recycling and composting 4 The entity shall discuss its emission reduction target(s) and analyse its performance against the target(s), including, if relevant:

4.1

The scope of the emission reduction target (for example, the percentage of total emissions to which the target is applicable);

4.2

total emissions to which the target is applicable);

4.2

Whether the target is absolute or intensity-based, and the metric denominator if it is an intensity-based target;

4.3

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;

4.4

The time lines for the reduction activity, including the start year, the target year and the base year;

4.5

target year and the base year;

4.5

The mechanism(s) for achieving the target; and

4.6

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.

5 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.

6 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.

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

7 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.

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

8 Disclosure of strategies, plans or reduction targets shall be limited to activities that were ongoing (active) or reached completion during the reporting period.

Fleet Fuel Management Topic Summary Many entities in the Waste Management industry own and operate large vehicle fleets for waste collection and transfer. The fuel consumption of vehicle fleets is a significant industry cost, both in terms of operating expenses and associated capital expenditures.

industry cost, both in terms of operating expenses and associated capital expenditures.

Fossil fuel consumption can contribute to environmental impacts, including climate change and pollution. These environmental impacts may affect waste management entities through increased regulatory exposure and reduced competitiveness of new contract proposals. Hedging fuel purchases is a common tool used to manage fleet-fuel

contract proposals. Hedging fuel purchases is a common tool used to manage fleet-fuel risks; however, increasingly, waste management entities are upgrading to more fuel-

efficient fleets or switching to natural gas vehicles. A cleaner-burning fleet also may be perceived favourably by communities living near waste management facilities with heavy traffic.

Metrics IF-WM-110b.1. (1) Fleet fuel consumed, (2) percentage natural gas and

(3) percentage renewable 1

IF-WM-110b.1. (1) Fleet fuel consumed, (2) percentage natural gas and

(3) percentage renewable 1 The entity shall disclose (1) the total amount of fuel consumed by its fleet vehicles as an aggregate figure, in gigajoules (GJ).

1.1

The calculation methodology for fuel consumed shall be based on actual fuel consumed as opposed to design parameters.

1.2

Acceptable calculation methodologies for fuel consumed may include methodologies based on:

1.2.1

Acceptable calculation methodologies for fuel consumed may include methodologies based on:

1.2.1

Adding fuel purchases made during the reporting period to beginning inventory at the start of the reporting period, minus any fuel inventory at the end of the reporting period

1.2.2

Tracking fuel consumed by vehicle

1.2.3

2 The entity shall disclose (2) the percentage of fuel consumed that is natural gas.

2.1

The percentage shall be calculated as the amount of natural gas consumed (in GJ) divided by the total amount of fuel consumed (in GJ).

3 The entity shall disclose (3) the percentage of fuel consumed that was renewable fuel.

3.1

Renewable fuel generally is defined as fuel that meets all the following requirements:

3.1.1

Produced from renewable biomass

3.1.2

requirements:

3.1.1

Produced from renewable biomass

3.1.2

Used to replace or reduce the quantity of fossil fuel present in a transportation fuel, heating oil or jet fuel

3.1.3

Achieved net greenhouse gas (GHG) emissions reduction on a life cycle basis

3.2

The entity shall disclose the standard or regulation used to determine if a fuel is renewable.

3.3

The percentage shall be calculated as the amount of renewable fuel consumed (in GJ) divided by the total amount of fuel consumed (in GJ).

consumed (in GJ) divided by the total amount of fuel consumed (in GJ).

4 The scope of disclosure is limited to fuel consumed by vehicles owned or operated by the entity.

5 In calculating energy consumption from fuels, the entity shall use higher heating values (HHV), also known as gross calorific values (GCV), which are directly measured or taken from the Intergovernmental Panel on Climate Change.

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

6 The entity shall apply conversion factors consistently for all data reported under this disclosure, such as the use of HHVs for fuel usage.

IF-WM-110b.2. Percentage of alternative fuel vehicles in fleet 1 The entity shall disclose the percentage of its fleet vehicles that are alternative fuel vehicles.

1.1

Alternative fuel vehicles are defined as vehicles powered by biodiesel,

denatured alcohol, electricity, hydrogen, methanol, mixtures containing

denatured alcohol, electricity, hydrogen, methanol, mixtures containing up to 85% methanol or denatured ethanol, natural gas, or propane (liquefied petroleum gas). Alternative energy vehicles also include any vehicle achieving a significant reduction in petroleum consumption,

advanced lean burn technology vehicles, fuel cell vehicles and hybrid electric vehicles.

1.2

The percentage shall be calculated as the number of alternative energy

electric vehicles.

1.2

The percentage shall be calculated as the number of alternative energy vehicles in its fleet divided by the total number of vehicles in its fleet.

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