ifrs-s2-ibg-volume-68-road-transportation-part-b

Title: Volume 68—Road Transportation

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 68—Road 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 68—Road Transportation

Industry Description

Road Transportation industry entities provide long- and short-haul freight trucking

services. Important activities include containerised and bulk freight shipment, including

consumer goods and a wide variety of commodities. Generally, the industry may be

categorised two ways: truckload (vehicles carrying the goods of only one customer) and

less-than-truckload (vehicles carrying the goods of multiple customers). Owner-operators

comprise the vast majority of the industry because of the relative ease of entry. A few

large operators maintain market share through contracts with major shippers. Large

entities often subcontract with owner-operators to supplement their owned fleet.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Revenue tonne-kilometres (RTK) 128 Quantitative

RTK

TR-RO-000.A Load factor 129 Quantitative Number TR-RO-000.B Number of employees, number of truck drivers Quantitative Number TR-RO-000.C Greenhouse Gas Emissions Topic Summary The Road Transportation industry generates emissions mainly through the combustion of

Topic Summary The Road Transportation industry generates emissions mainly through the combustion of diesel and other fossil fuels in truck engines. Greenhouse gases (GHGs) including carbon dioxide (CO2) are of particular importance to government regulators concerned about climate change and to consumers demanding low-carbon or carbon-neutral 128 Note to TR-RO-000.A – A revenue tonne-kilometre (RTK) is defined as one metric ton of revenue

128 Note to TR-RO-000.A – A revenue tonne-kilometre (RTK) is defined as one metric ton of revenue traffic transported one kilometre. RTK is computed by multiplying the vehicle-kilometres travelled on each leg by the number of metric tons of revenue traffic carried on that leg.

129 Note to TR-RO-000.B – Load factor is a measure of capacity utilisation and is calculated as cargo distance travelled divided by total distance travelled.

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

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 3

transportation solutions. Because GHG emissions from trucks constitute a significant portion of transportation-related emissions, the industry is a focal point for regulations to limit GHG emissions. Operational changes that increase fuel efficiency may reduce fuel costs while also limiting exposure to volatile fuel pricing, regulatory costs and other consequences of GHG emissions. Although newer trucks are more fuel-efficient, other

consequences of GHG emissions. Although newer trucks are more fuel-efficient, other measures also may improve efficiency and reduce emissions in existing fleets.

Metrics TR-RO-110a.1. Gross global Scope 1 emissions 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),

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

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.

2 Scope 1 emissions are defined and shall be calculated according to the methodology contained in The Greenhouse Gas Protocol: A Corporate Accounting and

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).

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

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

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

2011, published by IPIECA

2.1.6

Protocol for the quantification of greenhouse gas emissions from waste management activities published by Entreprises pour l’Environnement (EpE) IFRS S2 INDUSTRY-BASED GUIDANCE 4© IFRS Foundation

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 CDSB Framework for reporting environmental and social information.

3 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.

4 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

(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.

5 The entity may discuss the calculation methodology for its emissions disclosure,

such as if data is from continuous emissions monitoring systems (CEMS),

engineering calculations or mass balance calculations.

TR-RO-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 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).

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

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.

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.

3.1

Relevant activities and investments may include fuel optimisation efforts such as route and load optimisation, adoption of technology such as

such as route and load optimisation, adoption of technology such as engine and powertrain efficiency and aerodynamic improvements, use of electric- or natural gas-powered vehicles, weight reduction, improved tyre rolling resistance, hybridisation, and automatic engine shutdown.

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.

emissions sources.

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.

TR-RO-110a.3. (1) Total fuel consumed, (2) percentage natural gas and

(3) percentage renewable 1 The entity shall disclose (1) the total amount of fuel consumed from all sources as an aggregate figure, in gigajoules (GJ).

1.1

The calculation methodology for fuel consumed shall be based on actual

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 2

1.2.2

Tracking fuel consumed by vehicles

1.2.3

Tracking fuel expenses 2 The entity shall disclose (2) the percentage of fuel consumed that is natural gas.

2.1

The percentage shall be calculated as the amount of natural gas consumed (in GJ) divided by the total amount of fuel consumed (in GJ).

3 The entity shall disclose (3) the percentage of fuel consumed that was renewable fuel.

3.1

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

fuel.

3.1

Renewable fuel generally is defined as fuel that meets all of these requirements:IFRS S2 INDUSTRY-BASED GUIDANCE 6© IFRS Foundation

3.1.1

Produced from renewable biomass

3.1.2

Used to replace or reduce the quantity of fossil fuel present in a transportation fuel, heating oil or jet fuel

3.1.3

Achieved net greenhouse gas (GHG) emission reduction on a lifecycle basis

3.2

The entity shall disclose the standard or regulation used to determine if a fuel is renewable.

3.3

The percentage shall be calculated as the amount of renewable fuel consumed (in GJ) divided by the total amount of fuel consumed (in GJ).

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

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

5 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.

6 The entity shall apply conversion factors consistently for all data reported under

6 The entity shall apply conversion factors consistently for all data reported under this disclosure, such as the use of HHVs for fuel use (including biofuels).

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