ifrs-s2-ibg-volume-55-hardware-part-b

Title: Volume 55—Hardware

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

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

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PDF: https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards-issb/english/2023/issued/part-b/ifrs-s2-ibg-volume-55-hardware-part-b.pdf?bypass=on

Year: 2023

Type: Industry

Industry-based Guidance on implementing

Climate-related Disclosures

Volume 55—Hardware

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 55—Hardware

Industry Description

Hardware industry entities design and sell technology hardware products, including

computers, consumer electronics, communications equipment, storage devices,

components and peripherals. Many entities in the industry rely heavily upon the

Electronic Manufacturing Services & Original Design Manufacturing (EMS & ODM)

industry for manufacturing services. The industry is expected to continue to grow as

technology use rapidly increases, especially among emerging market consumers.

Note: Entities engaged in activities of the Software & IT Services industry (TC-SI), Internet

Media & Services (TC-IM) industry or the EMS & ODM industry (TC-ES) should consider the

disclosure topics and metrics in those industries

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Number of units produced by product category 95

Quantitative

Number

TC-HW-000.A

Area of manufacturing facilities

Quantitative

Square

metres (m²)

TC-HW-000.B

Number

TC-HW-000.A

Area of manufacturing facilities

Quantitative

Square

metres (m²)

TC-HW-000.B

Percentage of production from owned facilities

Quantitative

Percentage

(%)

TC-HW-000.C

Note to TC-HW-410a.1 – Disclosure shall include a discussion of the approach to managing the

use of IEC 62474 declarable substances.

Note to TC-HW-410a.2 – Disclosure shall include a discussion of efforts to incorporate

environmentally focused principles into product design.

Note to TC-HW-000.A – The entity shall indicate the number of units produced during the

reporting period and whether they were manufactured in its own facilities or produced by

contract manufacturers or suppliers. Categories may include communications equipment,

components, computer hardware, computer peripherals, computer storage, consumer

electronics, other hardware, printing & imaging, and transaction management systems.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Product Lifecycle Management

Topic Summary

Entities in the Hardware industry face increasing challenges associated with

environmental and social externalities attributed to product manufacturing, transport,

use and disposal. Rapid obsolescence of hardware products may worsen these

externalities. Entities are designing more products with the entire lifecycle in mind.

Specific considerations include energy efficiency of products, hazardous material inputs,

and designing for and facilitating safe end-of-life disposal and recycling. Entities that

prioritise designing and manufacturing products with improved environmental and

social impacts may avoid costs associated with externalities, and they may be more likely

to grow consumer demand and market share, while eliminating potentially harmful

materials. Furthermore, entities that minimise environmental and social externalities of

products may be less exposed to increasing regulation and costs, such as those related to

extended producer responsibility.

Metrics

TC-HW-410a.1. Percentage of products by revenue that contain IEC 62474

declarable substances

The entity shall disclose the percentage of products sold during the reporting

period that contain declarable substances.

1.1

A product contains a declarable substance if, according to the

International

Electrotechnical

Commission’s

IEC

62474—Material

Declaration for Products of and for the Electrotechnical Industry, it contains an

amount of the declarable substance that is:

1.1.1

Above the ‘reporting threshold’

1.1.2

Within the scope of the ‘reporting application’ identified

1.1.3

1.1.2

Within the scope of the ‘reporting application’ identified

1.1.3

Within the mandatory ‘reporting requirement’

1.2

The entity shall calculate the percentage as the revenue from electrical,

electronic and related technology products sold that contain a declarable

substance(s) divided by total revenue from electrical, electronic and related

technology products sold.

The scope of disclosure includes all electrical, electronic and related technology

products, including products from an entity not required to declare or otherwise

making declarations, according to IEC 62474.

Note to TC-HW-410a.1

The entity shall describe how it manages the use of substances listed as declarable

substance groups or declarable substances in IEC 62474, including a discussion of

specific operational processes during which use of these substances is considered

and the actions the entity has taken to manage the use of these substances.

1.1

Relevant management approaches and actions to describe may include:

1.1.1

Product design criteria for the exclusion of substances (for

example, banned substances lists)

IFRS S2 INDUSTRY-BASED GUIDANCE

1.1.2

Use of material substitution assessments, materials and parts

procurement

guidelines,

product

safety

testing,

product

declarations (for example, material safety data sheets) and product

labelling

If the entity assesses and manages the impact of known or potentially toxic

substances with reference to other regulations, industry norms or accepted

chemical lists, it may identify those practices, and it shall describe the degree of

overlap with IEC 62474.

TC-HW-410a.2. Percentage of eligible products, by revenue, meeting the

requirements for EPEAT registration or equivalent

The entity shall disclose the percentage of products sold during the reporting

period that meet the requirements for Electronic Product Environmental

Assessment Tool (EPEAT) registration or an equivalent standard.

1.1

A product meets the requirements of EPEAT registration if it appears on

1.1

A product meets the requirements of EPEAT registration if it appears on

the EPEAT Registry, or the entity can otherwise demonstrate that the

product meets these requirements.

1.2

Standards that are equivalent to EPEAT include those that have criteria

and requirements related to substantially similar topics, such as:

1.2.1

Reduction or elimination of environmentally sensitive materials

1.2.2

Material selection and declaration

1.2.3

Design for end-of-life

1.2.4

1.2.2

Material selection and declaration

1.2.3

Design for end-of-life

1.2.4

Product longevity or lifecycle extension

1.2.5

Energy conservation

1.2.6

End-of-life management

1.2.7

Corporate performance

1.2.8

Packaging

1.3

Examples of standards equivalent to EPEAT may include the Total Cost of

Ownership (TCO) Development fourth generation family of standards.

The entity shall calculate the percentage as the revenue from products sold

during the reporting period that meet the requirements for EPEAT registration, or

an equivalent standard, divided by total revenue from products eligible for EPEAT

registration.

2.1

Eligible products are those in a product category for which EPEAT

registration

exists,

which

includes

desktop

computers,

notebook

computers, computer displays and mobile phones.

2.2

which

includes

desktop

computers,

notebook

computers, computer displays and mobile phones.

2.2

Product categories currently outside the scope of EPEAT registration, but

for which an equivalent standard exists may be considered eligible

products.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Note to TC-HW-410a.2

The entity shall describe how it includes environmentally focused principles into

product design.

1.1

Environmentally focused principles or criteria include those outlined in

the International Electrotechnical Commission’s (IEC) Environmentally

Conscious Design (IEC-62430 or IEC-62075).

1.2

The discussion shall include:

1.2.1

Elimination of toxic substances

1.2.2

Use of recycled materials

1.2.3

Reduction of packaging

1.2.4

Design for consolidated shipping

1.2.5

Use of recycled materials

1.2.3

Reduction of packaging

1.2.4

Design for consolidated shipping

1.2.5

Design of low energy consumption products

1.2.6

Design for product take-back

1.2.7

Labelling for recycling

1.2.8

Elimination or replacement of materials subject to resource

scarcity (for example, cobalt and rare earth elements)

TC-HW-410a.3. Percentage of eligible products, by revenue, certified to an energy

efficiency certification

The entity shall disclose the percentage of its revenue from eligible products

certified to an energy efficiency certification.

1.1

The entity shall calculate the percentage as the revenue from products

meeting the requirements for the applicable certification divided by total

revenue from products eligible for certification by certification.

1.1.1

Eligible products are those in a product category for which

certification exists, which may include: audio and video

equipment, battery charging systems, computers, data centre

storage, displays, enterprise servers, imaging equipment, set-top

boxes and cable boxes, large network equipment, small network

equipment, telephony, televisions and uninterruptible power

supplies.

The entity shall disclose the percentage of products by revenue by energy

efficiency certification.

2.1

If the entity has products certified to a previous version of an energy

2.1

If the entity has products certified to a previous version of an energy

efficiency certification, it shall disclose this information, including which

version of the standard to which its products are certified, a breakdown of

how many products are certified to that version of the standard, and time

lines to achieve certification to the most current version of the standard.

For each jurisdiction where the entity sells products, the entity shall disclose the

applicable certification programme.

IFRS S2 INDUSTRY-BASED GUIDANCE

TC-HW-410a.4. Weight of end-of-life products and e-waste recovered; percentage

recycled

The entity shall disclose the weight, in metric tons, of end-of-life material

recovered, including through reverse logistics services, recycling services, product

take-back programmes and refurbishment services.

1.1

End-of-life material recovered is defined as products, materials and parts,

including electronic waste material (e-waste) that at the end of their useful

life would have otherwise been disposed of as waste or used for energy

recovery, but have instead been collected.

1.2

The scope of end-of-life material recovered includes materials physically

handled by the entity.

1.3

The scope of end-of-life material recovered includes materials of which the

entity did not take physical possession, but were collected by a third party

for the expressed purpose of reuse, recycling or refurbishment.

1.4

The scope of end-of-life material recovered excludes materials collected for

repair or that are under warranty and subject to recall.

The entity shall disclose the percentage of end-of-life material recovered and

subsequently recycled.

2.1

The percentage shall be calculated as the weight of end-of-life material

subsequently recycled.

2.1

The percentage shall be calculated as the weight of end-of-life material

recovered and subsequently recycled divided by the total weight of end-of-

life material recovered.

2.2

Recycled material (including remanufactured material) is defined as waste

material reprocessed or treated by means of production or manufacturing

processes and made into a final product or a component for incorporation

into a product.

2.3

processes and made into a final product or a component for incorporation

into a product.

2.3

The scope of recycled material includes material reused or reclaimed.

2.3.1

Reused material is defined as recovered products or components of

products used for the same purpose for which they were conceived,

including products donated or refurbished by the entity or by third

parties.

2.3.2

Reclaimed material is defined as material processed to recover or

regenerate a usable product.

2.4

Reclaimed material is defined as material processed to recover or

regenerate a usable product.

2.4

The scope of recycled material includes primary recycled material, co-

products (outputs of equal value to primary recycled materials), by-

products (outputs of lesser value to primary recycled materials) and

material sent externally for further recycling.

2.5

The scope of recycled material excludes portions of products and materials

discarded in landfills.

2.6

discarded in landfills.

2.6

Electronic waste material (e-waste) shall be considered recycled only if the

entity can demonstrate that it transferred this material to entities with

third-party certification to a standard for e-waste recycling such as the e-

Stewards® Standard for Responsible Recycling and Reuse of Electronic

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Equipment or the Responsible Recycling Practices (R2) Standard for

Electronic Recyclers.

2.6.1

The entity shall disclose the standard(s) complied with by the

entities to which it has transferred e-waste.

IFRS S2 INDUSTRY-BASED GUIDANCE

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