ifrs-s2-ibg-volume-47-chemicals-part-b

Title: Volume 47—Chemicals

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

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

Navigator: https://www.ifrs.org/issued-standards/ifrs-sustainability-standards-navigator/sustainability-pdf-collection/

Model: https://www.ifrs.org/content/ifrs/home/issued-standards/ifrs-sustainability-standards-navigator/sustainability-pdf-collection/jcr:content/root/responsivegrid_1242322373/standarddocument.model.json

PDF: https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards-issb/english/2023/issued/part-b/ifrs-s2-ibg-volume-47-chemicals-part-b.pdf?bypass=on

Year: 2023

Type: Industry

Industry-based Guidance on implementing

Climate-related Disclosures

Volume 47—Chemicals

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).

Disclaimer: To the extent permitted by applicable law, the ISSB and the IFRS Foundation

(Foundation) expressly disclaim all liability howsoever arising from this publication or

any translation thereof whether in contract, tort or otherwise to any person in respect of

any claims or losses of any nature including direct, indirect, incidental or consequential

loss, punitive damages, penalties or costs.

Information contained in this publication does not constitute advice and should not be

substituted for the services of an appropriately qualified professional.

Reproduction and use rights are strictly limited to personal non-commercial use, such as

corporate disclosure.

Any other use, such as – but not limited to – reporting software, investment analysis,

data services and product development is not permitted without written consent. Please

contact the Foundation for further details at sustainability_licensing@ifrs.org.

The Foundation has trade marks registered around the world (Marks) including ‘IAS®’,

‘IASB®’, the IASB® logo, ‘IFRIC®’, ‘IFRS®’, the IFRS® logo, ‘IFRS for SMEs®’, the IFRS for SMEs®

logo,

‘International

Accounting

Standards®’,

‘International

Financial

Reporting

Standards®’, the ‘Hexagon Device’, ‘NIIF®’, ‘SIC®’ and SASB®. Further details of the

Foundation’s Marks are available from the Foundation on request.

The Foundation is a not-for-profit corporation under the General Corporation Law of the

State of Delaware, USA and operates in England and Wales as an overseas company

(Company number: FC023235) with its principal office in the Columbus Building, 7

Westferry Circus, Canary Wharf, London, E14 4HD.

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 47—Chemicals

Industry Description

Entities in the Chemicals industry transform organic and inorganic feedstocks into more

than 70,000 diverse products with a range of industrial, pharmaceutical, agricultural,

housing, automotive and consumer applications. The industry commonly is segmented

into basic (commodity) chemicals, agricultural chemicals and specialty chemicals. Basic

chemicals, the largest segment by volume produced, include bulk polymers,

petrochemicals, inorganic chemicals and other industrial chemicals. Agricultural

chemicals include fertilisers, crop chemicals and agricultural biotechnology. Specialty

chemicals include paints and coatings, agrochemicals, sealants, adhesives, dyes,

industrial gases, resins and catalysts. Larger entities may produce basic, agricultural and

specialty chemicals, but most entities are specialised. Chemicals entities typically

manufacture and sell products globally.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Production by reportable segment 82 Quantitative Cubic metres (m³) or metric tons (t) RT-CH-000.A Greenhouse Gas Emissions Topic Summary Chemical manufacturing generates direct (Scope 1) greenhouse gas (GHG) emissions from fossil fuel combustion in manufacturing and cogeneration processes, as well as process emissions from the chemical transformation of feedstocks. GHG emissions may result in

emissions from the chemical transformation of feedstocks. GHG emissions may result in regulatory compliance costs or penalties and operating risks for chemicals entities.

However, the financial effects may vary depending on the magnitude of emissions and the prevailing emissions regulations. The industry may be subject to increasingly stringent regulations as countries try to limit or reduce emissions. Entities that cost-

stringent regulations as countries try to limit or reduce emissions. Entities that cost-

effectively manage GHG emissions through greater energy efficiency, the use of alternative fuels or manufacturing process advances may benefit from improved operating efficiency and reduced regulatory risk, among other financial benefits.

Metrics RT-CH-110a.1. Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations 1

emissions-limiting 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),

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

1.1

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

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).

World Resources Institute and the World Business Council on Sustainable Development (WRI/WBCSD).

82 Note to RT-CH-000.A – Production should be disclosed for each of the entity’s reportable segments, where production is reported as weight for solid products and volume for liquid and gas products.

IFRS S2 INDUSTRY-BASED GUIDANCE 4© IFRS Foundation

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

Greenhouse Gas Inventory Guidance: Direct Emissions from Stationary Combustion Sources published by the US Environmental Protection Agency (EPA)

2.1.2

India GHG Inventory Program

2.1.3

ISO 14064-1

2.1.4

Petroleum Industry Guidelines for Reporting GHG Emissions, 2nd edition,

2.1.3

ISO 14064-1

2.1.4

Petroleum Industry Guidelines for Reporting GHG Emissions, 2nd edition,

2011, published by IPIECA

2.1.5

Protocol for the quantification of greenhouse gas emissions from waste management activities published by Entreprises pour l’Environnement (EpE)

2.1.6

WBCSD Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain

2.2

GHG emissions data shall be consolidated and disclosed according to the

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 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 may include:

3.1.1

3.1

Examples of emissions-limiting regulations may include:

3.1.1

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

3.1.2

European Union Emissions Trading Scheme (EU ETS)

3.1.3

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

3.2

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

3.2.1

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

3.2.1

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

3.3

The scope of emissions-limiting regulations excludes emissions covered under voluntary emissions-limiting regulations (for example, voluntary trading systems), as well as reporting-based regulations.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 5

4 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.

5 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.

6 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.

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

RT-CH-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 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

methodology contained in The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (GHG Protocol), Revised Edition, March 2004,

published by the World Resources Institute and the World Business Council on Sustainable Development (WRI/WBCSD).

1.2

The scope of GHG emissions includes the seven GHGs covered under the Kyoto Protocol—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),

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

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

2 The entity shall discuss its emission reduction target(s) and analyse its performance against the target(s), including, if relevant:

2.1

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

2.2

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

2.3

denominator if it is an intensity-based target;

2.3

The percentage reduction against the base year, with the base year representing the first year against which emissions are evaluated towards the achievement of the target;

2.4

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

2.5

The mechanism(s) for achieving the target; and

2.6

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

2.6

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

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

IFRS S2 INDUSTRY-BASED GUIDANCE 6© IFRS Foundation

3 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.

4 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.

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

5 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.

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

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

Energy Management Topic Summary Chemical manufacturing is typically energy-intensive, with energy used to power processing units, cogeneration plants, machinery and non-manufacturing facilities. The type of energy used, amount consumed and energy management strategies depends on

type of energy used, amount consumed and energy management strategies depends on the type of products manufactured. Typically, fossil fuels such as natural gas and natural gas liquids are the predominant form of non-feedstock energy used, while purchased electricity also may be a significant share. Therefore, energy purchases may be a significant share of production costs. An entity’s energy mix may include energy generated on-site, purchased grid electricity and fossil fuels, and renewable and

generated on-site, purchased grid electricity and fossil fuels, and renewable and alternative energy. Trade-offs in the use of energy sources include cost, reliability of supply, related water use and air emissions, and regulatory compliance and risk. As such,

an entity’s energy intensity and energy sourcing decisions may affect its operating efficiency and risk profile over time.

Metrics RT-CH-130a.1. (1) Total energy consumed, (2) percentage grid electricity,

(3) percentage renewable and (4) total self-generated energy 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,

including energy purchased from external sources and energy produced by the entity itself (self-generated). For example, direct fuel usage, purchased

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.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 7

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 consumption divided by total energy consumption.

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.

3.2

The percentage shall be calculated as renewable energy consumption divided by total energy consumption.

3.3

divided by total energy consumption.

3.3

The scope of renewable energy includes renewable fuel the entity consumed, renewable energy the entity directly produced and renewable energy the entity purchased, if purchased through a renewable power purchase agreement (PPA) that explicitly includes renewable energy certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy Certified utility or supplier programme, or other green power products

Certified utility or supplier programme, or other green power products that explicitly include RECs or GOs, or for which Green‐e Energy Certified RECs are paired with grid electricity.

3.3.1

For any renewable electricity generated on-site, any RECs and GOs shall be retained (not sold) and retired or cancelled on behalf of the entity for the entity to claim them as renewable energy.

3.3.2

For renewable PPAs and green power products, the agreement shall

3.3.2

For renewable PPAs and green power products, the agreement shall explicitly include and convey that RECs and GOs be retained or replaced and retired or cancelled on behalf of the entity for the entity to claim them as renewable energy.

3.3.3

The renewable portion of the electricity grid mix that is outside of the control or influence of the entity is excluded from the scope of renewable energy.

3.4

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

renewable energy.

3.4

For the purposes of this disclosure, the scope of renewable energy from biomass sources is limited to materials certified to a third-party standard (for example, Forest Stewardship Council, Sustainable Forest Initiative,

Programme for the Endorsement of Forest Certification or American Tree Farm System), materials considered eligible sources of supply according to the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or

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 disclose (4) the amount of energy self-generated by the entity as an aggregate figure, in gigajoules (GJ).

IFRS S2 INDUSTRY-BASED GUIDANCE 8© IFRS Foundation

4.1

The entity may disclose the amount of self-generated energy sold to an electric utility or end-use customer.

4.2

The entity may disclose the amount of self-generated energy that was renewable energy, where renewable energy is defined above.

5 The entity shall apply conversion factors consistently for all data reported under this disclosure, such as the use of HHVs for fuel usage (including biofuels) and conversion of kilowatt hours (kWh) to GJ (for energy data including electricity

conversion of kilowatt hours (kWh) to GJ (for energy data including electricity from solar or wind energy).

Note to RT-CH-130a.1 1 The entity shall discuss its efforts to reduce energy consumption or improve energy efficiency throughout the manufacturing and production processes.

2 The entity shall discuss implementation of Green Chemistry Principle 6, ‘Design for Energy Efficiency’, including, if relevant, efforts such as conducting reactions

for Energy Efficiency’, including, if relevant, efforts such as conducting reactions at ambient temperature and pressure, reducing key materials that require energy-

intensive processing (for example, distillation and drying), using excess steam and heat to generate energy, improving catalytic processes, and other process improvements that result in gains in energy efficiency.

2.1

Relevant strategies to discuss include the use of incremental improvement,

2.1

Relevant strategies to discuss include the use of incremental improvement,

the implementation of best practice technology, the use of emerging technologies, and the development of ‘game changers’, consistent with the International Council of Chemical Associations (ICCA) Technology Road Map.

3 The entity may disclose the aggregate energy savings (in gigajoules) achieved through such efforts and processes.

Water Management Topic Summary

through such efforts and processes.

Water Management Topic Summary Used primarily for cooling, steam generation and feedstock processing, water is a critical input in chemicals production. Long-term historical increases in water scarcity and cost,

and expectations of continued increases—because of over-consumption and reduced supplies resulting from population growth and shifts, pollution and climate change—

show the importance of water management. Water scarcity may result in a higher risk of

show the importance of water management. Water scarcity may result in a higher risk of operational disruption for entities with water-intensive operations, and can increase water procurement costs and capital expenditures. Meanwhile, chemical manufacturing may generate process wastewater that must be treated before disposal. Non-compliance with water quality regulations may result in regulatory compliance and mitigation costs

with water quality regulations may result in regulatory compliance and mitigation costs or legal expenses stemming from litigation. Reducing water use and consumption through increased efficiency and other water management strategies may result in lower operating costs over time and may mitigate financial effects of regulations, water supply shortages and community-related disruptions of operations.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 9

Metrics RT-CH-140a.1. (1) Total water withdrawn, (2) total water consumed; percentage of each in regions with High or Extremely High Baseline Water Stress 1 The entity shall disclose the amount of water, in thousands of cubic metres,

withdrawn from all sources.

1.1

Water sources include surface water (including water from wetlands,

rivers, lakes and oceans), groundwater, rainwater collected directly and stored by the entity, and water and wastewater obtained from municipal

stored by the entity, and water and wastewater obtained from municipal water supplies, water utilities or other entities.

2 The entity may disclose portions of its supply by source if, for example, significant portions of withdrawals are from non-freshwater sources.

2.1

Fresh water may be defined according to the local laws and regulations where the entity operates. If no legal definition exists, fresh water shall be considered to be water that has less than 1,000 parts per million of

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

2.2

Water obtained from a water utility in compliance with jurisdictional drinking water regulations can be assumed to meet the definition of fresh water.

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

consumed in its operations.

3.1

Water consumption is defined as:

3.1.1

Water that evaporates during withdrawal, use and discharge

3.1.2

3.1.1

Water that evaporates during withdrawal, use and discharge

3.1.2

Water that is directly or indirectly included in the entity’s product or service

3.1.3

Water that does not otherwise return to the same catchment area from which it was withdrawn, such as water returned to another catchment area or the sea 4 The entity shall analyse all its operations for water risks and identify activities that withdraw and consume water in locations with High (40–80%) or Extremely

that withdraw and consume water in locations with High (40–80%) or Extremely High (>80%) Baseline Water Stress as classified by the World Resources Institute’s (WRI) Water Risk Atlas tool, Aqueduct.

5 The entity shall disclose water withdrawn in locations with High or Extremely High Baseline Water Stress as a percentage of the total water withdrawn.

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

6 The entity shall disclose water consumed in locations with High or Extremely High Baseline Water Stress as a percentage of the total water consumed.

RT-CH-140a.2. Number of incidents of non-compliance associated with water quality permits, standards and regulations 1 The entity shall disclose the total number of incidents of non-compliance,

including violations of a technology-based standard and exceedances of quantity or quality-based standards.

IFRS S2 INDUSTRY-BASED GUIDANCE 10

or quality-based standards.

2 The scope of disclosure includes incidents governed by applicable jurisdictional statutory permits and regulations, which include the discharge of a hazardous substance, violation of pre-treatment requirements or total maximum daily load (TMDL) exceedances.

3 The scope of disclosure shall only include incidents of non-compliance that resulted in a formal enforcement action(s).

3.1

Formal enforcement actions are defined as governmental actions that

3.1

Formal enforcement actions are defined as governmental actions that address a violation or threatened violation of water quantity or quality laws, regulations, policies or orders, and can result in administrative penalty orders, administrative orders and judicial actions, among others.

4 Violations shall be disclosed, regardless of their measurement methodology or frequency. These include violations for:

4.1

Continuous discharges, limitations, standards and prohibitions that are

4.1

Continuous discharges, limitations, standards and prohibitions that are generally expressed as maximum daily, weekly and monthly averages; and

4.2

Non-continuous discharges, limitations that are generally expressed in terms of frequency, total mass, maximum rate of discharge and mass or concentration of specified pollutants.

RT-CH-140a.3. Description of water management risks and discussion of strategies and practices to mitigate those risks 1

strategies and practices to mitigate those risks 1 The entity shall describe its water management risks associated with water withdrawals, water consumption and discharge of water or wastewater.

1.1

Risks associated with water withdrawals and water consumption include risks to the availability of adequate, clean water resources, which include:

1.1.1

Environmental constraints—such as operating in water-stressed regions,drought,concerns of aquatic impingement or

regions,drought,concerns of aquatic impingement or entrainment, interannual or seasonal variability, and risks from the impact of climate change

1.1.2

Regulatory and financial constraints—such as volatility in water costs, stakeholder perceptions and concerns related to water withdrawals (for example, those from local communities, non-

governmental organisations and regulatory agencies), direct competition with and impact from the actions of other users (for

competition with and impact from the actions of other users (for example, commercial and municipal users), restrictions to withdrawals because of regulations, and constraints on the entity’s ability to obtain and retain water rights or permits

1.2

Risks associated with the discharge of water or wastewater include the ability to obtain rights or permits related to discharges, regulatory compliance related to discharges, restrictions to discharges, the ability to

compliance related to discharges, restrictions to discharges, the ability to maintain control over the temperature of water discharges, liabilities,

reputational risks and increased operating costs because of regulation,

stakeholder perceptions and concerns related to water discharges (for example, those from local communities, non-governmental organisations and regulatory agencies).

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

2.1

How risks may vary by withdrawal source, including surface water (including water from wetlands, rivers, lakes and oceans), groundwater,

rainwater collected directly and stored by the entity, and water and wastewater obtained from municipal water supplies, water utilities or other entities; and

2.2

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

groundwater or wastewater utilities.

3 The entity may discuss the potential effects that water management risks may have on its operations and the time line over which such risks are expected to manifest.

3.1

Effects include those associated with costs, revenue, liabilities, continuity of operations and reputation.

4 The entity shall discuss its short- and long-term strategies or plans to mitigate water management risks, which include:

4.1

water management risks, which include:

4.1

The scope of its strategy, plans, goals or targets, such as how they relate to various business units, geographies or water-consuming operational processes.

4.2

Any water management goals or targets it has prioritised, and an analysis of performance against those goals or targets.

4.2.1

Goals and targets include those associated with reducing water withdrawals,reducing water consumption,reducing water

withdrawals,reducing water consumption,reducing water discharges, reducing aquatic impingements, improving the quality of water discharges and regulatory compliance.

4.3

The activities and investments required to achieve the plans, goals or targets, and any risks or limiting factors that might affect achievement of the plans or targets.

4.4

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

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

5 For water management targets, the entity shall additionally disclose:

5.1

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

5.2

The time lines for the water management activities, including the start year, the target year and the base year.

5.3

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

5.3.1

5.3

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

5.3.1

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

5.3.2

Product innovations, such as redesigning products or services to require less water;

5.3.3

Process and equipment innovations, such as those that enable the reduction of aquatic impingements or entrainments;

5.3.4

Use of tools and technologies (for example, the World Wildlife Fund Water Risk Filter, the Global Water Tool and Water Footprint Network Footprint Assessment Tool) to analyse water use, risks and opportunities; and

5.3.5

Collaborations or programmes in place with the community or other organisations

5.4

5.3.5

Collaborations or programmes in place with the community or other organisations

5.4

The percentage reduction or improvement from the base year, in which the base year is the first year against which water management targets are evaluated towards the achievement of the target.

6 The entity shall discuss whether its water management practices result in any additional lifecycle impacts or trade-offs in its organisation, including trade-offs

additional lifecycle impacts or trade-offs in its organisation, including trade-offs in land use, energy production and greenhouse gas (GHG) emissions, and why the entity chose these practices despite lifecycle trade-offs.

Product Design for Use-phase Efficiency Topic Summary As increasing resource scarcity and regulations encourage greater materials efficiency and lower energy consumption and emissions, the Chemicals industry may benefit from

and lower energy consumption and emissions, the Chemicals industry may benefit from developing products that enhance customer efficiency. From reducing automobile emissions through materials optimisation to improving building insulation performance,

Chemicals industry products can enhance efficiency across many applications. Entities that develop cost-effective solutions to meet customer demand for improved efficiency

that develop cost-effective solutions to meet customer demand for improved efficiency may benefit from increased revenue and market share, stronger competitive positioning and enhanced brand value.

Metrics RT-CH-410a.1. Revenue from products designed for use-phase resource efficiency 1 The entity shall disclose its total revenue from products designed to increase resource efficiency during their use-phase.

1.1

Products designed to increase resource efficiency are defined as those that,

1.1

Products designed to increase resource efficiency are defined as those that,

through their use, can improve energy efficiency, eliminate or lower greenhouse gas (GHG) emissions, reduce raw materials consumption,

increase product longevity or reduce water consumption.

1.2

The use-phase is defined as the course over which the entity’s product is used by a customer or consumer as a final product or the course over which the entity’s product is used by a customer or consumer to generate

which the entity’s product is used by a customer or consumer to generate a final product (for example, in a manufacturing or production process).

2 A product shall be considered to have been designed to increase use-phase resource efficiency if documentation shows that the entity has tested, modelled or otherwise established the increase to resource efficiency its product delivers during its use-phase.

2.1

The scope of disclosure includes products that eliminate emissions during the use-phase, the need for a raw material or the need for a process component like water.

2.2

the use-phase, the need for a raw material or the need for a process component like water.

2.2

The scope of disclosure includes products that impart an incremental improvement to resource efficiency, as far as the entity can demonstrate the improvement is meaningful.

2.3

The scope of disclosure excludes products that impart improved resource efficiency in an ancillary, indirect or minimal way (for example, a conventional product that is slightly lighter than the previous generation

conventional product that is slightly lighter than the previous generation of the product).

3 Examples of products that increase resource efficiency may include insulation materials, high-albedo paints and coating, fuel additives that result in more efficient combustion, energy-efficient lighting materials, additives or materials that extend the useful life of use-phase products, materials that enable vehicle lightweighting (for example, polymers to replace metals), biofuels, solar films,

lightweighting (for example, polymers to replace metals), biofuels, solar films,

solar shingles and other renewable energy materials.

© IFRS Foundation 15 Columbus Building 7 Westferry Circus Canary Wharf London E14 4HD, UK Tel+44 (0) 20 7246 6410 Email sustainability_licensing@ifrs.org ifrs.org International Financial Reporting Standards®, IFRS Foundation®,

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