Volume 41—Forestry Management

Title: Volume 41—Forestry 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 41—Forestry 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 41—Forestry Management

Industry Description

Forestry Management industry entities own or manage natural and planted forestry lands

and timber tracts or operate non-retail tree nurseries and rubber plantations. The

industry conducts operations on lands that can be entity-owned or leased from public or

private landowners. Entities typically sell timber to wood products manufacturers, pulp

and paper producers, energy producers, and a variety of other customers. Although some

integrated entities also may operate sawmills, wood products facilities, or pulp and paper

facilities, sustainability issues arising from these activities are addressed in the Building

Products & Furnishings (CG-BP) and Pulp & Paper Products (RR-PP) industries.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Ecosystem

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Ecosystem

Services &

Impacts

Area of forestland certified to a third-

party forest management standard,

percentage certified to each

standard 67

Quantitative

Hectares,

Percentage

(%)

RR-FM-160a.1

Area of forestland with protected

conservation status

Quantitative

Hectares

RR-FM-160a.2

Area of forestland in endangered

species habitat

Quantitative

Hectares

RR-FM-160a.3

Description of approach to optimising

opportunities from ecosystem services

Hectares

RR-FM-160a.3

Description of approach to optimising

opportunities from ecosystem services

provided by forestlands

Discussion

and Analysis

n/a

RR-FM-160a.4

Climate

Change

Adaptation

Description of strategy to manage

opportunities for and risks to forest

management and timber production

presented by climate change

Discussion

and Analysis

n/a

RR-FM-450a.1

Table 2. Activity Metrics

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Area of forestland owned, leased, and/or managed by

the entity

CATEGORY

UNIT OF

MEASURE

CODE

Area of forestland owned, leased, and/or managed by

the entity

Quantitative

Hectares

RR-FM-000.A

Aggregate standing timber inventory 68

Quantitative

Cubic metres

(m³)

RR-FM-000.B

continued...

Note to RR-FM-160a.1 – The entity shall describe forestry management practices for non-

certified forestlands, and for any forest management certifications that were suspended or

terminated, the entity shall disclose the number, associated acreage, and stated reason for

suspension or termination.

Note to RR-FM-000.B – The entity may additionally note if it uses other units of measure to

define its standing timber inventory, and it shall disclose any conversion factors used.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

...continued

ACTIVITY METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Timber harvest volume 69

Quantitative

Cubic metres

(m³)

RR-FM-000.C

Ecosystem Services & Impacts

Topic Summary

Along with their timber output, forests provide valuable ecosystem services including

carbon sequestration, wildlife habitat, water purification and storage, soil formation, and

recreational opportunities. Meanwhile, in many regions, regulations related to water

quality and endangered species protection, as well as harvesting rights that are

contingent upon environmental preservation, may create operational risks for entities. As

such, protecting or enhancing ecosystem services within managed forestlands could

mitigate reputational, demand and operational risks related to the potential adverse

environmental impacts of forestry. Entities increasingly use third-party certification to

show sustainable forestry management practices that serve to enhance forest asset value

and productivity, as well as to meet rising consumer demand for sustainably produced

forest products.

Metrics

RR-FM-160a.1. Area of forestland certified to a third-party forest management

standard, percentage certified to each standard

The entity shall disclose its total forestland area, in acres, certified to a third-party

forest management standard, where:

1.1

The scope includes forestlands owned, leased or managed by the entity.

1.2

Third-party forest management standards certify entities harvest forests in

a sustainable manner based on 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.

1.3

Third-party forest management certifications may include those promoted

by the following organisations (or the equivalent):

1.3.1

American Tree Farm System (ATFS)

1.3.2

Forest Stewardship Council (FSC)

1.3.3

Programme for the Endorsement of Forest Certification (PEFC)

1.3.4

1.3.3

Programme for the Endorsement of Forest Certification (PEFC)

1.3.4

Forest certification systems endorsed by the PEFC

1.3.5

Sustainable Forest Initiative (SFI)

Note to RR-FM-000.C – The entity may additionally note if it uses other units of measure to

define its timber harvest volume, and it shall disclose any conversion factors used.

IFRS S2 INDUSTRY-BASED GUIDANCE

If a forestland area is certified to more than one certification standard, the entity

shall not account for the acreage more than once when calculating the total

forestland area certified to a third-party forest management standard.

The entity shall disclose the percentage of the total certified forestland certified to

each forest management standard (for example, FSC, SFI, PEFC and ATFS) and

show the associated certification(s) (for example, FSC Forest Management

Certification, SFI Forest Management Standard, PEFC Sustainable Forest

Management certification or ATFS Individual Third-Party certification).

3.1

The entity shall calculate the percentage of forestland certified to each

forest management standard as the number of acres third-party certified

to the respective standard divided by the total number of certified acres

owned, leased or managed by the entity.

The entity shall disclose the percentage of acres certified to more than one

certification scheme.

Note to RR-FM-160a.1

The entity shall provide a brief description of its forestry management practices

implemented for non-certified forestlands owned, leased or managed by the

entity.

The entity may discuss:

2.1

The topics and criteria addressed by the practices(s), such as: forest

productivity and health, protection from ecological and biodiversity

impacts, protection of water resources, noise impacts, discharges to water,

protection of special sites, plantation farming, harvesting techniques, use

of monocultures, use of genetically modified organisms (GMOs), chemical

usage, community involvement, indigenous communities, and aesthetics

and recreation, among others

2.2

How the entity enforces the sustainable forestry management plans in its

2.2

How the entity enforces the sustainable forestry management plans in its

non-certified forestlands, including the type and frequency of inspections

2.3

The underlying references for its forestry management plan(s) for non-

certified forestlands, including the degree to which its forest management

practices are aligned with criteria outlined in third-party sustainable

forestry management standards and ASTM D7480, Guide for Evaluating the

Attributes of a Forest Management Plan; whether these references are codes,

guidelines, standards or regulations; and whether they were developed by

the entity, an industry, organisation, a third-party organisation (for

example, a non-governmental organisation), a governmental agency or

some combination of these groups

If policies and practices to ensure sustainable forest management vary

significantly by forestland, the entity shall describe variations for each non-

certified forestland and disclose the percentage of acres to which they were

applied.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

The entity shall disclose whether any forest management certifications were

involuntarily suspended or terminated during the reporting period (for failure to

meet the standard or resolve major non-conformities).

The entity shall disclose which certification(s) was suspended or terminated, the

total acreage of land for which certification was suspended or terminated, the

reason stated by the certification body or bodies for why the certification was

suspended or terminated, and any other explanatory information about the

suspension or termination.

The entity may discuss any relevant corrective actions taken in response to a

certification being suspended or terminated.

RR-FM-160a.2. Area of forestland with protected conservation status

The entity shall disclose the area of owned, leased or managed forestland (by

acreage) that has protected conservation status, where an area is considered to

have protected conservation status if it is located within:

1.1

Areas legally designated as protected by government regulation, including

national parks, national wildlife refuge sites, wilderness areas, state

forests, state parks and areas under conservation easement, as well as sites

categorised as such by NatureServe and State Natural Resource Agencies,

and agencies associated with the network of Natural Heritage or

Conservation Data Centres, or Natura 2000 sites.

1.1.1

These sites may be listed in the World Database of Protected Areas

(WDPA) and mapped on ProtectedPlanet.net.

The scope includes areas of conservation status actively managed by or for the

entity and excludes areas of conservation status exclusively set aside for

conservation and not actively managed.

2.1

The scope includes areas of conservation status that are government-

owned and managed by the entity.

The entity may disclose the percentage of the area of forestland with protected

conservation status certified to a third-party forest management standard.

The entity may discuss the likelihood of a change to the area of its owned, leased

or managed forestland that is considered to have protected conservation status.

The entity may separately identify forestland areas with additional ecological,

biodiversity or conservation designations, such as those listed by the A–Z Guide of

Areas of Biodiversity Importance prepared by the United Nations Environment

Programme’s World Conservation Monitoring Centre (UNEP-WCMC).

RR-FM-160a.3. Area of forestland in endangered species habitat

The entity shall disclose the area of owned, leased or managed forestland (by

acreage) located in endangered species habitat.

Forestlands are considered to be an endangered species habitat if a species that is

classified by applicable jurisdictional laws or regulations as endangered or

threatened inhabits the entity’s forestlands.

IFRS S2 INDUSTRY-BASED GUIDANCE

The scope of disclosure includes forestlands owned, leased or managed by the

entity.

An endangered species is defined as any species that is in danger of extinction

throughout all or a significant portion of its range of habitat.

A threatened species is defined as any species that is likely to become an

endangered species within the foreseeable future throughout all or a significant

portion of its range.

Endangered species habitats include critical habitat areas where the entity owns,

leases or manages forestlands officially designated by applicable jurisdictional

laws or regulations providing endangered species lists in the regions where the

entity owns, leases or manages forestlands.

The entity may disclose the types of endangered or threatened species in its

forestlands.

The entity shall disclose whether any overlap exists between the areas identified

in RR-FM-160a.2 and RR-FM-160a.3.

The entity may provide discussion around forestlands located in endangered

species habitats, but which present low risk to biodiversity or ecosystem services.

The entity may discuss the likelihood of a change to the area of its owned, leased

or managed forestland considered to be an endangered species habitat.

10.1

Discussion may include:

10.1.1 Whether an endangered or threatened species habitat lies near, but

Discussion may include:

10.1.1 Whether an endangered or threatened species habitat lies near, but

not currently in, the entity’s forestlands, and whether the habitat(s)

could overlap with the entity’s forestlands

10.1.2 Whether species in or near the entity’s forestlands are classified as

endangered or threatened in non-government regulatory lists, but

not currently by government regulatory lists, and whether these

species may be classified as endangered or threatened by a

regulatory endangered species list

10.1.3 Whether the current endangered or threatened species habitat in

the entity’s forestlands is expected to change or expand in the

future

10.2

The entity may disclose the likelihood of these changes occurring and the

area of its forestlands that could be affected.

RR-FM-160a.4. Description of approach to optimising opportunities from

ecosystem services provided by forestlands

The entity shall discuss how it optimises the opportunities created by the

ecosystem services that its forestlands provide, where:

1.1

Ecosystem services are defined by the Millennium Ecosystem Assessment

as the benefits obtained from ecosystems, which include: provisioning

services (goods or products obtained from ecosystems), such as food, fresh

water, timber and fibre; regulating services (benefits obtained from an

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

ecosystem’s control of natural processes), such as climate, erosion and

pollination; cultural services (nonmaterial benefits obtained from an

ecosystem), such as recreational and spiritual benefits; and supporting

services (services that maintain the other ecosystem services), such as

nutrient cycling, primary production and water cycling.

1.2

Opportunities from effective ecosystem services management may include

higher land value, increased productivity and timber yield, direct

payments for timber and non-timber forest products, and improved

relationships with stakeholders.

For ecosystems services for which the entity receives no direct payments, the

entity shall describe how it manages these ecosystem services. The discussion

shall include:

2.1

The type(s) of ecosystem service(s) the entity manages, where types of

ecosystem services may include: air quality, soil stabilisation and erosion

control, and cultural value

2.2

The entity’s management actions, including decisions about harvesting,

management of conservation areas or areas of high biodiversity, or

conserving forested watershed

For the ecosystem services for which the entity does receive direct payments, the

entity may disclose the amount the entity receives for non-timber ecosystem

goods and services and the type of compensation it receives, which may include:

3.1

Public payments to landowners (from the government)

3.2

Voluntary payments to landowners (from businesses, individuals and non-

governmental organisations)

3.3

Compliance-driven payments (payments made to comply with government

regulations)

The entity may disclose whether the revenue received from these non-timber or

regulations)

The entity may disclose whether the revenue received from these non-timber or

timber ecosystem services may change in the future and the methods or models

used to develop these scenarios, including the use of global models or scientific

research provided by governmental and non-governmental organisations.

The entity may discuss how management of non-timber ecosystem services is

expected to affect tree growth and timber yield.

Climate Change Adaptation

Topic Summary

expected to affect tree growth and timber yield.

Climate Change Adaptation

Topic Summary

Global climate change may create long-term business uncertainty for some forestry

management entities. Variations in precipitation patterns and temperatures, more

frequent extreme weather events and forest fires, and an increased prevalence of tree

diseases and pests may impact timberlands adversely through increased mortality or

diminished productivity. Conversely, positively impacting forest productivity, climate

change also may facilitate forest productivity through increased atmospheric carbon

dioxide, a longer growing season, moderating temperatures in high latitudes, greater

precipitation, and expanded geographical ranges for some species. Considering such

IFRS S2 INDUSTRY-BASED GUIDANCE

variability, entities may benefit from identifying and understanding potential long-term

impacts of climate change on the productivity of forestlands and from adjusting forestry

management strategies to optimise the productivity of their forestland assets.

Metrics

RR-FM-450a.1. Description of strategy to manage opportunities for and risks to

forest management and timber production presented by climate change

The entity shall discuss the risks or opportunities presented by climate scenarios

to owned, leased or managed forestlands, including, if relevant, those presented

by:

1.1

Physical impacts which may include increased temperatures, changes in

growth rates, changes in seasonality, availability of water, pest migration,

increased frequency of fires and increased frequency of extreme weather

events

1.2

Existing and potential legislation and regulation related to climate change,

events

1.2

Existing and potential legislation and regulation related to climate change,

including those that limit emissions, tax emissions, set up cap-and-trade

systems, affect the demand for the entity’s products or otherwise affect

the entity

1.3

International accords relating to climate change

1.4

Indirect consequences of regulation or business trends, including legal,

technological or other developments related to climate change

1.5

technological or other developments related to climate change

1.5

Other political and social risks, such as increased harvesting restrictions,

or stakeholder perceptions or concerns (for example, those from local

communities, non-governmental organisations and regulatory agencies)

For each of the risks or opportunities identified, the entity shall provide:

2.1

A description of the risk or opportunity, including an explanation and

2.1

A description of the risk or opportunity, including an explanation and

qualitative assessment of current and anticipated (long- and short-term)

significant risks or opportunities associated with climate change

2.1.1

Disclosure corresponds to CDSB Framework for reporting environmental

and social information (CDSB Framework) Requirement 03.

2.2

Strategic analysis of the long- and short-term impact climate change

actually and potentially has on the entity’s strategic objectives

2.2.1

actually and potentially has on the entity’s strategic objectives

2.2.1

Disclosure corresponds to CDSB Framework Requirements 02, 05

and 06.

2.3

The potential effect (direct or indirect) the risk or opportunity may have

on the entity’s business, and the projected magnitude of the effect

2.3.1

Where the entity has quantified the potential financial effects of

the risk or opportunity (disclosure corresponds to CDSB Framework

Requirements 03 and 06.)

2.4

the risk or opportunity (disclosure corresponds to CDSB Framework

Requirements 03 and 06.)

2.4

The time frame in which the risk or opportunity is expected to manifest

2.4.1

Disclosure corresponds to CDSB Framework Requirement 03.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

2.5

The likelihood that the risk or opportunity will manifest

2.5.1

Disclosure corresponds to CDP Climate Change Questionnaire CC5.1

and CC6.1.

The entity shall discuss how potential climate-related risks or opportunities may

vary among the following, and how it prioritises the risks and opportunities

identified (disclosure corresponds to CDP Climate Change Questionnaire CC2.1c):

3.1

The regions where the entity owns, leases or manages forestlands

3.2

3.1

The regions where the entity owns, leases or manages forestlands

3.2

The entity’s products, services or markets

3.3

The types of tree species harvested by the entity

3.4

The entity’s plantation forestlands and its natural forestlands

The entity shall provide a discussion of the scenarios used to determine the risks

and opportunities presented by climate change, including:

4.1

The methods or models used to develop these scenarios, including the use

4.1

The methods or models used to develop these scenarios, including the use

of global models or scientific research provided by governmental and non-

governmental organisations (for example, the Intergovernmental Panel on

Climate Change Climate Scenario Process)

The entity shall discuss its risk management procedures with respect to climate

change risks and opportunities, including:

5.1

How far into the future risks are considered

5.2

The frequency of monitoring

5.3

5.1

How far into the future risks are considered

5.2

The frequency of monitoring

5.3

The entity’s alleviation strategies, which may include: use of insurance;

diversification of tree species; actions to strengthen the adaptive capacity

of forestlands; strategies to reduce the risk and intensity of pest, disease

and fire outbreaks; or plans to reduce risk and intensity of potential

damage

5.4

The entity’s adaptation strategies, which may include: improving

damage

5.4

The entity’s adaptation strategies, which may include: improving

ecosystem management and biodiversity; monitoring changes; developing

tolerant tree varieties; and optimising the timing of planting and

harvesting

5.5

The costs associated with these actions

5.6

Disclosure corresponds to CDP Climate Change Questionnaire CC2.1.

IFRS S2 INDUSTRY-BASED GUIDANCE

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