Title: Volume 39—Water Utilities & Services
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 39—Water Utilities & Services
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 Foundation 2023
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IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023
© IFRS Foundation
1
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
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
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
2
© IFRS Foundation
Volume 39—Water Utilities & Services
Industry Description
Water Utilities & Services industry entities own and operate water supply and wastewater
treatment systems (generally structured as regulated utility businesses) or provide
operational and other specialised water services to system owners (usually market-based
operations). Water supply systems include the sourcing, treatment and distribution of
water to residences, businesses and other entities such as governments. Wastewater
water to residences, businesses and other entities such as governments. Wastewater
systems collect and treat wastewater, including sewage, greywater, industrial waste fluids
and stormwater runoff, before discharging the resulting effluent back into the
environment.
Note: The scope of the Water Utilities & Services (IF-WU) industry excludes water services
categorised as infrastructure design and development. These activities fall within the
Engineering & Construction Services (IF-EC) industry.
Engineering & Construction Services (IF-EC) industry.
Sustainability Disclosure Topics & Metrics
Table 1. Sustainability Disclosure Topics & Metrics
TOPIC
METRIC
CATEGORY
UNIT OF
MEASURE
CODE
Energy
Management
(1) Total energy consumed,
(2) percentage grid electricity and
(3) percentage renewable Quantitative Gigajoules (GJ),Percentage (%) IF-WU-130a.1 Distribution Network Efficiency Water main replacement rate 60 Quantitative Rate IF-WU-140a.1 Volume of non-revenue real water losses
Quantitative Rate IF-WU-140a.1 Volume of non-revenue real water losses Quantitative Thousand cubic metres (m³) IF-WU-140a.2 End-Use Efficiency Percentage of water utility revenue from rate structures designed to promote conservation and revenue resilience Quantitative Percentage (%) IF-WU-420a.1 Customer water savings from efficiency measures, by market 61 Quantitative Cubic metres (m³) IF-WU-420a.2 Water Supply Resilience Total water sourced from regions with
Cubic metres (m³) IF-WU-420a.2 Water Supply Resilience Total water sourced from regions with High or Extremely High Baseline Water Stress; percentage purchased from a third party Quantitative Thousand cubic metres (m³),Percentage (%) IF-WU-440a.1 Volume of recycled water delivered to customers Quantitative Thousand cubic metres (m³) IF-WU-440a.2 Discussion of strategies to manage risks associated with the quality and availability of water resources Discussion and Analysis n/a IF-WU-440a.3
availability of water resources Discussion and Analysis n/a IF-WU-440a.3 continued...
60 Note to IF-WU-140a.1 – The entity shall discuss the use of and challenges associated with planned and corrective maintenance in its distribution system.
61 Note to IF-WU-420a.2 – The entity shall discuss customer efficiency measures that are required by regulations for each of its relevant markets.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 3
...continued
TOPIC
METRIC
CATEGORY
UNIT OF
MEASURE
CODE
Network Resiliency &Impacts of Climate Change Wastewater treatment capacity located in 100-year flood zones Quantitative Cubic metres (m³) per day IF-WU-450a.1
(1) Number and (2) volume of sanitary sewer overflows (SSO) and
(3) percentage of volume recovered Quantitative Number,Cubic metres (m³),Percentage (%) IF-WU-450a.2
(1) Number of unplanned service disruptions and (2) customers affected,
each by duration category 62 Quantitative
disruptions and (2) customers affected,
each by duration category 62 Quantitative Number IF-WU-450a.3 Description of efforts to identify and manage risks and opportunities related to the impact of climate change on distribution and wastewater infrastructure Discussion and Analysis n/a IF-WU-450a.4 Table 2. Activity Metrics
ACTIVITY METRIC
CATEGORY
UNIT OF
MEASURE
CODE
Number of: (1) residential, (2) commercial, and
(3) industrial customers served, by service provided 63 Quantitative Number
(3) industrial customers served, by service provided 63 Quantitative Number IF-WU-000.A Total water sourced, percentage by source type 64 Quantitative Cubic metres (m³),Percentage (%) IF-WU-000.B Total water delivered to: (1) residential, (2) commercial,
(3) industrial, and (4) all other customers 65 Quantitative Thousand cubic metres (m³) IF-WU-000.C Average volume of wastewater treated per day, by
(1) sanitary sewer, (2) stormwater, and (3) combined sewer Quantitative Cubic metres
(1) sanitary sewer, (2) stormwater, and (3) combined sewer Quantitative Cubic metres (m³) per day IF-WU-000.D Length of (1) water mains and (2) sewer pipe Quantitative Kilometres (km) IF-WU-000.E 62 Note to IF-WU-450a.3 – The entity shall discuss notable service disruptions such as those that affected a significant population or those of extended duration.
63 Note to IF-WU-000.A – The number of customers served is defined as the number of individual
63 Note to IF-WU-000.A – The number of customers served is defined as the number of individual service agreements for water or wastewater services at single properties, where an individual may own more than one property and be counted as a customer more than once. The entity may disclose additional customer types if such customer types exist that do not fall within the scope of the customer types described above. Disclosure of the number of customers by customer type
of the customer types described above. Disclosure of the number of customers by customer type shall additionally be broken out by the number of customers (in each customer type) provided with water services, and separately, provided with wastewater services. The entity may additionally disclose the number of customers (in each customer type) by other types of services.
64 Note to IF-WU-000.B – Water sourced shall be disclosed by the direct source in which the entity
64 Note to IF-WU-000.B – Water sourced shall be disclosed by the direct source in which the entity obtains water, as classified by the following water source types: groundwater, surface water,
ocean water, recycled water, water purchased from third parties, and other sources.
65 Note to IF-WU-000.C – The amount of water delivered includes drinking water, industrial process water, and recycled water.
IFRS S2 INDUSTRY-BASED GUIDANCE 4© IFRS Foundation
Energy Management Topic Summary Entities in the Water Utilities & Services industry consume significant amounts of energy for the withdrawal, conveyance, treatment, and distribution or discharge of potable water and wastewater. Typically, an entity’s largest operating cost after purchased water,
chemicals, labour and utility operating costs is energy use. Purchased grid electricity is the most common energy input. In more remote locations, entities may use on-site
the most common energy input. In more remote locations, entities may use on-site generation to power equipment. The inefficient use of purchased grid electricity creates environmental externalities, such as increased Scope 2 greenhouse gas emissions.
Environmental regulations may affect the future grid energy mix, resulting in price increases. Additionally, climate change is expected to impact grid reliability and affect
increases. Additionally, climate change is expected to impact grid reliability and affect the availability of water resources. As a result, water utility energy intensity may increase in the future as water resource access becomes more difficult. Alternative water treatment, such as recycling and desalination, also can require more energy. Together with decisions about the use of alternative fuels, renewable energy and on-site electricity
with decisions about the use of alternative fuels, renewable energy and on-site electricity generation, energy efficiency can influence both the cost and the reliability of the energy supply.
Metrics IF-WU-130a.1. (1) Total energy consumed, (2) percentage grid electricity and
(3) percentage renewable 1 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,
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
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).
2 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
2.1
The percentage shall be calculated as purchased grid electricity consumption divided by total energy consumption.
3 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.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 5
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
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
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
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
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.
4 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
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).
5 The scope of disclosure includes all water, wastewater, and stormwater operations and services.
5.1
The entity may categorise out its disclosures by water, wastewater or stormwater services.
Distribution Network Efficiency Topic Summary
stormwater services.
Distribution Network Efficiency Topic Summary Water utilities develop, maintain and operate complex interconnected infrastructure networks that include extensive pipelines, canals, reservoirs and pump stations.
Distribution networks may lose significant volumes of water (called ‘non-revenue water’
because it is a distributed volume of water not reflected in customer billings). This water
because it is a distributed volume of water not reflected in customer billings). This water is lost primarily because of infrastructure failures and inefficiencies, such as leaking IFRS S2 INDUSTRY-BASED GUIDANCE 6© IFRS Foundation
pipes and service connections. Non-revenue real water losses may impact financial performance, raise customer rates, and squander water and other resources such as energy and treatment chemicals. Conversely, improvements to infrastructure and operating processes may limit non-revenue losses, increase revenue and reduce costs.
Efficiently directing operational and maintenance expenses or capital expenditures to distribution systems including primarily pipeline and service connection repair,
distribution systems including primarily pipeline and service connection repair,
refurbishment, or replacement may improve entity value and provide strong investment returns.
Metrics IF-WU-140a.1. Water main replacement rate 1 The entity shall disclose its water main replacement rate for the distribution system(s) it owns or operates.
1.1
The distribution system includes all water utility components for the distribution of finished or potable water to customers or other users. This
distribution of finished or potable water to customers or other users. This includes the distribution of water for non-potable uses, including fire suppression.
2 The percentage shall be calculated as the total length of pipe replaced during the reporting period divided by the total length of water mains in its distribution system.
2.1
The scope of water main replacements includes complete main replacements, as well as rehabilitations or renewals that substantially
replacements, as well as rehabilitations or renewals that substantially extend the life of the water main.
2.2
The scope of water main replacements excludes water main repairs.
3 The scope of disclosure is limited to water operations and services (wastewater and stormwater services are excluded).
Note to IF-WU-140a.1 1 The entity shall describe the use of, and challenges associated with, planned and corrective maintenance in its distribution system, where:
1.1
corrective maintenance in its distribution system, where:
1.1
Corrective maintenance is defined as all maintenance undertaken after asset failure.
1.2
Planned maintenance is defined as all regular maintenance activities undertaken in advance of asset failure.
2 Relevant challenges to describe may include the impacts of corrosion and soil properties on pipe materials (for example, cast iron, ductile iron, polyvinyl chloride and wood), the entity’s ability to finance maintenance and replacement
chloride and wood), the entity’s ability to finance maintenance and replacement through rate adjustments, and the age of the current distribution network.
IF-WU-140a.2. Volume of non-revenue real water losses 1 The entity shall disclose the volume, in cubic metres, of non-revenue real water losses from the distribution system.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 7
1.1
Non-revenue real water losses are defined as the physical water losses,
which are not billed and produce no revenue, from the pressurised system and storage tanks up to the point of customer consumption, which is the customer meter for those utilities that meter their customers. In unmetered systems, the delineation is the point at which the customer becomes responsible for customer service connection piping maintenance and repairs. Real losses include leakage from mains and service
and repairs. Real losses include leakage from mains and service connections and storage tank overflows.
2 The entity shall calculate the amount of non-revenue real water losses according to applicable jurisdictional laws or regulations when such loss occurs.
3 The scope of disclosure is limited to water operations and services (wastewater and stormwater services are excluded).
4 If applicable jurisdictional laws or regulations do not exist, the entity shall
4 If applicable jurisdictional laws or regulations do not exist, the entity shall calculate the volume of real losses according to voluntary initiatives.
5 The entity may disclose the technique(s) employed to measure non-revenue water from real losses and the amount calculated according to each technique employed.
End-Use Efficiency Topic Summary Consumer level water efficiency and conservation—whether a product of government
Topic Summary Consumer level water efficiency and conservation—whether a product of government mandates, environmental consciousness or demographic trends—is increasingly important for long-term resource availability and the financial performance of the water supply segment of the industry. How utilities work with regulators to mitigate revenue declines while increasing end-use resource efficiency may be financially material. Water
declines while increasing end-use resource efficiency may be financially material. Water efficiency mechanisms, including rate decoupling, may ensure that a utility’s revenue can adequately cover its fixed costs and provide the desired level of returns regardless of sales volume, while incentivising customers to conserve water. Efficiency mechanisms can align utilities’ economic incentives with environmental and social interests,
can align utilities’ economic incentives with environmental and social interests,
including improved resource efficiency, lower rates and increased capital investments in infrastructure. Water utilities may manage rate mechanism impacts through positive regulatory relations, forward-looking rate cases that incorporate efficiency and a strong execution of efficiency strategy.
Metrics IF-WU-420a.1. Percentage of water utility revenue from rate structures designed
Metrics IF-WU-420a.1. Percentage of water utility revenue from rate structures designed to promote conservation and revenue resilience 1 The entity shall disclose the percentage of water utility revenue from rate structures designed to promote conservation and revenue resilience.
1.1
The scope of rate structures designed to promote conservation and revenue resilience is limited to rate structures explicitly and intentionally designed to:
1.1.1
revenue resilience is limited to rate structures explicitly and intentionally designed to:
1.1.1
Financially incentivise customers to reduce water consumption or improve water efficiency IFRS S2 INDUSTRY-BASED GUIDANCE 8© IFRS Foundation
1.1.2
Improve the revenue resilience of the water utility, primarily in circumstances of declining average customer water use or improving average customer water efficiency
1.2
The scope of rate structures that are designed to promote conservation and revenue resilience includes revenue decoupled rate structures.
1.2.1
Revenue decoupled rate structures are defined as a rate adjustment mechanism that separates the utility’s fixed cost recovery from the
mechanism that separates the utility’s fixed cost recovery from the volume sold, and the utility’s revenue is collected based on the regulatory determined revenue requirement.
1.2.2
Revenue decoupled rate structures may also be referred to as
‘revenue regulation’ or ‘revenue cap regulation’ in which the regulator sets up an allowed revenue requirement and adjusts collections to achieve allowed, or ‘target’, revenue irrespective of actual sales.
1.2.3
collections to achieve allowed, or ‘target’, revenue irrespective of actual sales.
1.2.3
Additional guidance on the scope of revenue decoupled rate structures is contained in Alternative Regulation and Ratemaking Approaches for Water Companies, The Brattle Group, September 23, 2013.
1.3
The scope of rate structures designed to promote conservation and revenue resilience may include rate structures that contain a lost revenue adjustment mechanism (LRAM).
1.3.1
adjustment mechanism (LRAM).
1.3.1
Rate structures that contain an LRAM are defined as volumetric rates that contain a mechanism allowing the entity to recover revenues lost directly resulting from water conservation, water efficiency, or demand side management programmes the entity directly manages or implements.
1.3.2
Additional guidance on the scope of revenue decoupled rate structures is contained in Alternative Regulation and Ratemaking
structures is contained in Alternative Regulation and Ratemaking Approaches for Water Companies, The Brattle Group, September 23,
2013.
1.3.3
The scope of LRAM includes mechanisms that allow the estimation of lost revenue based on the programmes’ actual impacts, but it excludes lost revenue from planned or forecast programmes’
impacts (as described in Alternative Regulation and Ratemaking Approaches for Water Companies, The Brattle Group, September 23,
2013).
1.4
Approaches for Water Companies, The Brattle Group, September 23,
2013).
1.4
The scope of rate structures designed to promote conservation and revenue resilience excludes straight fixed variable rate design, absent other rate mechanisms explicitly designed to promote conservation.
2 The percentage shall be calculated as the regulated water utility revenue from rate structures designed to promote conservation and revenue resilience divided by total regulated water utility revenue.
by total regulated water utility revenue.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 9
3 The scope of disclosure is limited to water operations and services (wastewater and stormwater services are excluded).
IF-WU-420a.2. Customer water savings from efficiency measures, by market 1 The entity shall disclose the total volume of water savings, in cubic metres, from water efficiency measures installed or otherwise supported by the entity during the reporting period for each of its markets.
1.1
Markets are defined as those operations subject to distinct public utility
1.1
Markets are defined as those operations subject to distinct public utility regulatory oversight.
2 Water savings shall be defined according to the gross savings approach as the changes in water consumption or demand that result from programme-related actions taken by participants in an efficiency programme, regardless of why they participated.
2.1
The entity should list those markets where it reports water savings on a net savings basis, and thus may be different from the figures disclosed
net savings basis, and thus may be different from the figures disclosed here.
2.1.1
Net water savings are defined as changes in consumption specifically attributable to a water efficiency programme that would not otherwise have happened without the programme.
3 Water savings shall be calculated on a gross basis, but consistent with the methodology set forth in jurisdictional evaluation, measurement, and verification (EM&V) regulations when such savings occur.
4
(EM&V) regulations when such savings occur.
4 If jurisdictional regulations do not exist, the entity shall calculate water savings in a manner consistent with the measurement and verification methods outlined by Efficiency Valuation Organisation’s (EVO) International Performance Measurement and Verification Protocol: Concepts and Options for Determining Energy and Water Savings,
Volume 1 (IPM&V Protocol).
5 The entity shall consider the EVO IPM&V Protocol and jurisdictional regulations
5 The entity shall consider the EVO IPM&V Protocol and jurisdictional regulations as normative references, thus any updates made year-on-year shall be considered updates to this guidance.
6 The scope of disclosure is limited to water operations and services (wastewater and stormwater services are excluded).
Note to IF-WU-420a.2 1 The entity shall describe customer efficiency measures required by regulations for each of its relevant markets, including a discussion of:
1.1
each of its relevant markets, including a discussion of:
1.1
The amount or percentage of water savings from efficiency measures required by regulations for each market
1.2
Instances of non-compliance with water savings obligations
1.2.1
In such instances, the entity shall disclose the difference between the water savings delivered and the amount required by the regulation.
IFRS S2 INDUSTRY-BASED GUIDANCE 10© IFRS Foundation
1.3
Water savings delivered that exceed those required by regulations that resulted in the entity receiving energy efficiency performance incentives,
including the value of any such incentives 2 The entity shall describe the forms of regulation in each market that allow for or incentivise water efficiency, including a discussion of the benefits, challenges and financial effects associated with such regulations.
3 Relevant policy mechanisms to discuss may include:
3.1
Deferral decoupling
3.2
3 Relevant policy mechanisms to discuss may include:
3.1
Deferral decoupling
3.2
Current period decoupling
3.3
Single fixed variable rates
3.4
Lost revenue adjustments
3.5
Water efficiency feebates 4 The entity may describe incentives it has developed for its customers that promote end-use efficiency, which may include dynamic pricing, water efficiency rebates, and other measures to subsidise customer water efficiency.
5
rebates, and other measures to subsidise customer water efficiency.
5 The entity may describe voluntary initiatives in which it has participated to manage end-user water efficiency.
Water Supply Resilience Topic Summary Water supply systems obtain water from groundwater and surface water sources. Water supplies either may be accessed directly or purchased from a third party, often a government entity. Water scarcity, water source contamination, infrastructure failures,
government entity. Water scarcity, water source contamination, infrastructure failures,
regulatory restrictions, competing users and overconsumption by customers are all factors that may jeopardise sufficient water supply access. These issues, combined with an increasing risk of extreme and frequent drought conditions because of climate change, may result in inadequate supplies or mandated water restrictions. The related
change, may result in inadequate supplies or mandated water restrictions. The related financial impacts may manifest in diverse ways, depending on rate structure, but are most likely to impact entity value through decreased revenue. Water supply challenges also may increase the price of purchased water, which could result in higher operating costs. Failures of critical infrastructure such as aqueducts and canals, which could result
costs. Failures of critical infrastructure such as aqueducts and canals, which could result from events such as earthquakes, can present catastrophic risks to customers of the water supply system and could inflict untold financial consequences. Entities may mitigate water supply risks (and the resulting financial risks) through diversification of water supplies, sustainable withdrawal levels, technological and infrastructure
water supplies, sustainable withdrawal levels, technological and infrastructure improvements, contingency planning, positive relations with regulators and other major users, as well as rate structures.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 11
Metrics IF-WU-440a.1. Total water sourced from regions with High or Extremely High Baseline Water Stress; percentage purchased from a third party 1 The entity shall disclose the amount of fresh water, in thousands of cubic metres,
sourced from all sources in regions with High (40–80%) or Extremely High (>80%) Baseline Water Stress.
1.1
Water sources include surface water (including water from wetlands,
rivers, lakes and oceans), groundwater and wholesale water purchased from a third party.
1.2
rivers, lakes and oceans), groundwater and wholesale water purchased from a third party.
1.2
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.
1.3
Water obtained from a water utility in compliance with jurisdictional drinking water regulations can be assumed to meet the definition of fresh water.
1.4
drinking water regulations can be assumed to meet the definition of fresh water.
1.4
High or Extremely High Baseline Water Stress shall be classified by the World Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct.
2 The entity shall disclose the percentage of fresh water sourced in regions with High or Extremely High Baseline Water Stress that was purchased from a third party.
2.1
The percentage shall be calculated as the amount of fresh water sourced in
party.
2.1
The percentage shall be calculated as the amount of fresh water sourced in regions with High or Extremely High Baseline Water Stress (in thousands of cubic metres) purchased from a third party divided by the total amount of fresh water sourced in regions with High or Extremely High Baseline Water Stress (in thousands of cubic metres).
IF-WU-440a.2. Volume of recycled water delivered to customers 1 The entity shall disclose the volume, in cubic metres, of water recycled and
1 The entity shall disclose the volume, in cubic metres, of water recycled and delivered to its customers.
2 Recycled water shall be defined as wastewater treated to meet specific water quality criteria with the intention of being used for a range of purposes, which may include:
2.1
Potable reuse, such as direct augmentation of the drinking water supply and indirect augmentation of a drinking water source when an environmental buffer precedes drinking water treatment
2.2
environmental buffer precedes drinking water treatment
2.2
Non-potable reuse, such as recreational landscape irrigation, agricultural reuse, industrial process reuse and environmental reuse (for example,
wetland enhancement and groundwater recharge) 3 The amount of recycled water delivered shall be calculated as the amount of water that meets the quality standards for approved uses of recycled water as set forth through applicable jurisdictional laws or regulations where the recycling occurs.
forth through applicable jurisdictional laws or regulations where the recycling occurs.
IFRS S2 INDUSTRY-BASED GUIDANCE 12© IFRS Foundation
IF-WU-440a.3. Discussion of strategies to manage risks associated with the quality and availability of water resources 1 The entity shall identify and describe its significant risks associated with the quality and availability of, and access to, water resources, including a discussion of its strategies to manage such risks.
1.1
Relevant information to provide may include:
1.1.1
Environmental constraints such as water resources in water-
1.1.1
Environmental constraints such as water resources in water-
stressed regions, drought, interannual or seasonal variability,
severe weather events, risks from the impacts of climate change,
and any impacts or risks associated with contaminated sources.
1.1.2
Regulatory, infrastructure and financial constraints such as reliance on essential infrastructure to obtain water, risk of regulatory restrictions to obtaining sufficient water or the entity’s
regulatory restrictions to obtaining sufficient water or the entity’s ability to obtain and retain water rights, permits and allocations,
and stakeholder perceptions and concerns related to water sources (for example, those from local communities, non-governmental organisations and regulatory agencies).
1.1.3
How risks may vary by water source including surface water (including water from wetlands, rivers, lakes and oceans),
groundwater, rainwater or wholesale water supplies.
2
groundwater, rainwater or wholesale water supplies.
2 The entity shall include a description of the potential impacts these risks may have on its operations and the time line over which such risks are expected to manifest.
2.1
Impacts may include those associated with costs, revenue, liabilities,
continuity of operations, access to water and reputation.
3 The entity shall provide a discussion of its short- and long-term strategy or plans to manage these risks, including, when relevant:
3.1
to manage these risks, including, when relevant:
3.1
Diversification of water sources
3.2
Contingency planning in the event of critical infrastructure failure
3.3
The use of alternative, watershed-based approaches to align overall infrastructure decisions with overall watershed goals
3.4
The scope of its strategy, plans or targets, such as whether they pertain differently to different business units (for example, residential versus
differently to different business units (for example, residential versus industrial), geographies or regulatory frameworks (for example, rate structures or mandated water-use restrictions)
3.5
The activities and investments established to manage water sourced from areas of water stress or scarcity and any risks or limiting factors that might affect the ability to address water scarcity
3.6
The efforts to secure and retain reliable long-term water supplies through
3.6
The efforts to secure and retain reliable long-term water supplies through senior water rights, permits, or allocations, including the entity’s ability to secure water (for example, through purchase from a third party) should sufficient allocations be unavailable IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 13
4 Disclosure of strategies, plans and infrastructure investments shall be limited to activities that were active or reached completion during the reporting period.
5 The entity shall discuss if its management of water scarcity results in any additional lifecycle impacts or trade-offs including trade-offs in land use (for example, development of water storage facilities such as reservoirs), energy consumption, and greenhouse gas (GHG) emissions and why the entity chose
consumption, and greenhouse gas (GHG) emissions and why the entity chose these practices despite lifecycle trade-offs.
Network Resiliency & Impacts of Climate Change Topic Summary Climate change may create uncertainty for water supply systems and wastewater systems because of potential impacts on infrastructure and operations. Climate change may result in increased water stress, more frequent severe weather events, reduced water
result in increased water stress, more frequent severe weather events, reduced water quality and rising sea levels that could impair utility assets and operations. Water supply and wastewater disposal are basic services for which maintaining operational continuity is of utmost importance. The increasing frequency and severity of storms challenge water and wastewater treatment facilities, and these factors can affect service continuity.
and wastewater treatment facilities, and these factors can affect service continuity.
Intense precipitation may result in sewage volumes that exceed treatment facility capacity resulting in the release of untreated effluent. Minimising current and future risks of service disruptions and improving service quality may require additional capital expenditures and operational expenses. As the likelihood of extreme weather events
expenditures and operational expenses. As the likelihood of extreme weather events increases, entities that address these risks through redundancies and strategic planning may better serve customers and improve performance.
Metrics IF-WU-450a.1. Wastewater treatment capacity located in 100-year flood zones 1 The entity shall disclose the capacity, in cubic metres per day, of its wastewater treatment facilities located in 100-year flood zones.
1.1
treatment facilities located in 100-year flood zones.
1.1
100-year flood zones are defined as land areas subject to a 1% greater chance of flooding in any given year. Such areas also may be referenced as being subject to the 1% annual chance flood, the 1% annual exceedance probability flood or the 100-year flood.
1.1.1
Examples of 100-year flood zones may include coastal flood plains,
flood plains along major rivers and areas subject to flooding from ponding in low-lying areas.
2
flood plains along major rivers and areas subject to flooding from ponding in low-lying areas.
2 The scope of disclosure shall include all the entity’s wastewater treatment facilities located in 100-year flood zones.
IF-WU-450a.2. (1) Number and (2) volume of sanitary sewer overflows (SSO) and
(3) percentage of volume recovered 1 The entity shall disclose the (1) number of sanitary sewer overflows (SSO) originating from sewer systems under the entity’s operational control.
1.1
originating from sewer systems under the entity’s operational control.
1.1
SSOs are defined as overflows, spills, releases or diversions of wastewater from a sanitary sewer system.
IFRS S2 INDUSTRY-BASED GUIDANCE 14© IFRS Foundation
1.2
If regulations do not require reporting of SSOs, the entity shall disclose the calculation methodology or combination of methodologies used. Relevant methods may include:
1.2.1
Duration and flow rate comparison method
1.2.2
Upstream lateral connections method
1.2.3
Continuous flow metering 2 The entity shall disclose the (2) volume, in cubic metres, of SSOs originating from sewer systems under the entity’s operational control.
2.1
sewer systems under the entity’s operational control.
2.1
The volume of SSOs shall be calculated according to the methodologies used for regulatory reporting in the corresponding jurisdiction.
3 The entity shall report the (3) percentage of SSOs recovered, by volume.
3.1
The percentage shall be calculated as the volume, in cubic metres, of sewage discharged to the environment through SSOs that was recovered,
divided by the total amount of sewage discharged to the environment through SSOs.
3.2
divided by the total amount of sewage discharged to the environment through SSOs.
3.2
The recovered volume is defined as the amount of sewage discharged that was captured and returned to the sanitary sewer system, private lateral or collection system.
3.3
The volume of SSOs recovered shall be calculated according to the methodologies used for regulatory reporting in the corresponding jurisdiction.
3.4
If regulations do not require reporting the recovery of SSOs, the entity shall disclose the
3.4
If regulations do not require reporting the recovery of SSOs, the entity shall disclose the calculation methodology or combination of methodologies used. Relevant methods may include:
3.4.1
Measured volume method
3.4.2
Visual estimation method 4 The entity may describe programmes and initiatives including those programmes overseen by applicable jurisdictional legal or regulatory authorities and those the entity has developed internally to reduce the number and volume of SSOs and to
entity has developed internally to reduce the number and volume of SSOs and to mitigate such occurrences.
IF-WU-450a.3. (1) Number of unplanned service disruptions and (2) customers affected, each by duration category 1 The entity shall disclose the (1) number of unplanned service disruptions to its drinking water supply services and (2) the total number of customers affected by such disruptions.
1.1
An unplanned service disruption shall be defined according to the
such disruptions.
1.1
An unplanned service disruption shall be defined according to the applicable jurisdictional laws or regulations where the disruption occurred.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 15
1.2
In cases when regulations to define disruptions do not exist, disruptions shall be considered as incidents of complete water shutoff, low flow restrictions, boil-water advisories and water main flushing, and they exclude those incidents when a reduction of service occurs, but normal activities (for example, dishwashing, showering, laundry washing and toilet flushing) are maintained.
1.3
The scope of unplanned service disruptions shall be limited to those
1.3
The scope of unplanned service disruptions shall be limited to those disruptions that were not planned or scheduled and those disruptions exceeding the scheduled duration of disruption.
1.3.1
A scheduled disruption shall be defined according to local regulations where the disruption occurred. If such regulations do not exist, a scheduled disruption shall be considered a disruption for which the entity has provided a minimum of 24 hours advanced notification.
1.4
for which the entity has provided a minimum of 24 hours advanced notification.
1.4
Customers are defined as the number of individual service agreements for water services at single properties, where an individual may own more than one property and be counted as a customer more than once.
2 The entity shall disclose the number of unplanned service disruptions and the number of customers affected, by the length of duration category.
2.1
number of customers affected, by the length of duration category.
2.1
The length of duration categories is under four hours, between four and 12 hours, or 12 hours or more.
2.2
The duration of a disruption is defined as the time taken for all unplanned or emergency corrective activities by all utility employees and contractors working for the utility after discovery of an unplanned service disruption.
3 The scope of disclosure is limited to water operations and services (wastewater
3 The scope of disclosure is limited to water operations and services (wastewater and stormwater services are excluded).
4 The entity may separately disclose the number of disruptions that were intentionally planned or scheduled by the entity, the number of customers affected, and the duration of those disruptions.
Note to IF-WU-450a.3 1 The entity shall discuss notable service disruptions such as those that affected a significant number of customers or those of extended duration.
2
significant number of customers or those of extended duration.
2 For such disruptions, the registrant should provide:
2.1
Description and cause of the service disruptions
2.2
The costs associated with the service disruptions
2.3
Actions taken to mitigate the potential for future service disruptions
2.4
Any other significant outcomes (for example, legal proceedings) IFRS S2 INDUSTRY-BASED GUIDANCE 16© IFRS Foundation
IF-WU-450a.4. Description of efforts to identify and manage risks and opportunities related to the impact of climate change on distribution and wastewater infrastructure 1 The entity shall describe its efforts to identify and manage risks and opportunities associated with climate change-related impacts on its water distribution and wastewater infrastructure.
1.1
Risks include, among others, threats to the entity’s physical infrastructure
1.1
Risks include, among others, threats to the entity’s physical infrastructure resulting from climate change-related events (for example, rising sea levels, increasing storm intensity and impacts of drought) that could result in service disruption(s).
1.2
Opportunities include the need for infrastructure improvements within the entity’s current service area and the opportunity to expand its services through the water infrastructure.
2
through the water infrastructure.
2 The entity shall describe how it identifies and prioritises the potential for risks to,
and vulnerabilities of, its water distribution and wastewater infrastructure.
2.1
Relevant risks and vulnerabilities to describe may include those relating to the age, geographical location and physical qualities of the entity’s distribution infrastructure.
2.2
Relevant efforts to discuss include involvement in climate change adaptation and mitigation programmes.
3
adaptation and mitigation programmes.
3 The entity shall describe its efforts to manage the risks and opportunities associated with its water distribution and wastewater infrastructure including,
but not limited to, infrastructure development, current storm tracking, global gridded climate models and the use of redundant systems to assure service continuity.
4 The scope of disclosure includes all water, wastewater, and stormwater operations and services.
4.1
The scope of disclosure includes all water, wastewater, and stormwater operations and services.
4.1
The entity may categorise its disclosures by water, wastewater or stormwater services.
5 The entity may describe its efforts to manage risks and opportunities associated with its distribution network in the context of the rate case and rate making political environment, including the effects on the entity’s ability to expand,
maintain and enhance the resiliency of its distribution network.
maintain and enhance the resiliency of its distribution network.
IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 17
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