ifrs-s2-ibg-volume-67-rail-transportation-part-b

Title: Volume 67—Rail Transportation

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-67-rail-transportation-part-b.pdf?bypass=on

Year: 2023

Type: Industry

Industry-based Guidance on implementing

Climate-related Disclosures

Volume 67—Rail Transportation

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 67—Rail Transportation

Industry Description

Rail Transportation industry entities provide rail freight shipping and support services.

Important activities include shipping containerised and bulk freight, including consumer

goods and commodities. Rail entities typically own, maintain and operate their rail

networks, which may require significant capital expenditures. The industry exhibits

economies of density because of its network effects, potentially fostering natural

monopoly conditions. Together with the large sunk costs of rail infrastructure, this

provides a competitive advantage to incumbent entities in the industry and creates

barriers to entry for new entities.

Note: The scope of the Rail Transportation industry does not include passenger rail

transportation.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Revenue tonne-kilometres (RTK) 127

Quantitative

RTK

TR-RA-000.D

Number of employees

Quantitative

Number

TR-RA-000.E

Greenhouse Gas Emissions

Topic Summary

The Rail Transportation industry generates emissions mainly through the combustion of

diesel in locomotive engines. Despite relatively low emissions compared to other

transportation industries, fuel management has implications for industry entities in

terms of operating costs and regulatory compliance. Greenhouse gases (GHGs) including

carbon dioxide (CO2) are of particular importance to government regulators concerned

about climate change. Intensifying regulation of locomotive exhaust emissions and high

fuel costs encourage rail entities to invest in fuel efficiency enhancements to manage

emissions. These investments can improve an entity’s operational efficiency and cost

structure, with effects on value and competitive position both within the industry and

compared to other modes of transport.

Metrics

TR-RA-110a.1. Gross global Scope 1 emissions

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

carbon dioxide equivalents (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

compensated for emissions.

for offsets, credits or other similar mechanisms that have reduced or

compensated for emissions.

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).

127 Note to TR-RA-000.D – A revenue tonne-kilometre (RTK) is defined as one metric ton of revenue

traffic transported one kilometre. Revenue tonne-kilometres are calculated by multiplying the

kilometres travelled on each leg by the number of metric tons of revenue traffic carried on that

leg.

IFRS S2 INDUSTRY-BASED GUIDANCE

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 may include:

2.1.1

GHG Reporting Guidance for the Aerospace Industry published by the

International Aerospace Environmental Group (IAEG)

2.1.2

Greenhouse Gas Inventory Guidance: Direct Emissions from Stationary

Combustion Sources published by the US Environmental Protection

Agency (EPA)

2.1.3

Combustion Sources published by the US Environmental Protection

Agency (EPA)

2.1.3

India GHG Inventory Program

2.1.4

ISO 14064-1

2.1.5

Petroleum Industry Guidelines for reporting GHG emissions, 2nd edition,

2011, published by IPIECA

2.1.6

Protocol for the Quantification of greenhouse gas emissions from waste

management

activities

published

Entreprises

pour

l’Environnement (EpE)

2.2

GHG emissions data shall be consolidated and disclosed according to the

l’Environnement (EpE)

2.2

GHG emissions data shall be consolidated and disclosed according to the

approach with which the entity consolidates its financial reporting data,

which generally is aligned with the ‘financial control’ approach defined by

the GHG Protocol, and the approach published by the Climate Disclosure

Standards Board (CDSB) described in REQ-07, ‘Organisational boundary’, of

the CDSB Framework for reporting environmental and social information.

The entity may discuss any change in 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.

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.

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

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.

TR-RA-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

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 according to The Greenhouse Gas Protocol: A

1.1

Scope 1 emissions are defined according to 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).

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

1.2

The scope of GHG emissions includes the seven GHGs covered under the

Kyoto Protocol—carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O),

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

(SF6), and nitrogen trifluoride (NF3).

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

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

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 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,

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

reset.

The entity shall discuss the activities and investments required to achieve the

reset.

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.

3.1

Relevant

activities

and

investments

may

include

operational

improvements (such as decreased idling, trip optimisation and maximising

loads) and fleet enhancements (such as new engines, fuel optimisation

technology and aerodynamic fleet modifications, and upgrading the fleet

with new locomotives).

technology and aerodynamic fleet modifications, and upgrading the fleet

with new locomotives).

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.

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.

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

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

TR-RA-110a.3. Total fuel consumed, percentage renewable

The entity shall disclose the total amount of fuel consumed from all sources as an

aggregate figure, in gigajoules (GJ).

IFRS S2 INDUSTRY-BASED GUIDANCE

1.1

The calculation methodology for fuel consumed shall be based on actual

fuel consumed as opposed to design parameters.

1.2

Acceptable calculation methodologies for fuel consumed may include

methodologies based on:

1.2.1

Adding fuel purchases made during the reporting period to

beginning inventory at the start of the reporting period, minus any

fuel inventory at the end of the reporting period

1.2.2

Tracking fuel consumed by vehicles

1.2.3

Tracking fuel expenses

1.2.2

Tracking fuel consumed by vehicles

1.2.3

Tracking fuel expenses

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

2.1

Renewable fuel generally is defined as fuel that meets all of these

requirements:

2.1.1

Produced from renewable biomass;

2.1.2

Used to replace or reduce the quantity of fossil fuel present in a

transportation fuel, heating oil or jet fuel; and

2.1.3

Achieved net greenhouse gas (GHG) emissions reduction on a

lifecycle basis.

2.2

2.1.3

Achieved net greenhouse gas (GHG) emissions reduction on a

lifecycle basis.

2.2

The entity shall disclose the standard or regulation used to determine if a

fuel is renewable

2.3

The percentage shall be calculated as the amount of renewable fuel

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

The scope of disclosure only includes fuel directly consumed by the entity.

In calculating energy consumption from fuels, the entity shall use higher heating

values (HHV), also known as gross calorific values (GCV), which are directly

measured or taken from the Intergovernmental Panel on Climate Change (IPCC).

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).

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

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