As companies worldwide strive to enhance sustainability reporting, understanding the comparability between different reporting standards becomes crucial. The Internation Financial Reporting Standards and GRI (Global Reporting Initiative) have collaboratively released a joint analysis and mapping resource. The document sheds light on the areas of compatibility and divergence between the GRI 305: Emissions 2016 (GRI 305) and the International Sustainability Standards Board (ISSB) Climate-related Disclosures (IFRS S2) concerning greenhouse gas (GHG) emissions.
To successfully disclose Scope 1, Scope 2, and Scope 3 GHG emissions, companies must align with the requirements outlined in GRI 305 and IFRS S2. Fortunately, a significant degree of alignment exists between these standards, streamlining the reporting process for companies already disclosing under GRI 305.
Both GRI 305 and IFRS S2 necessitate the disclosure of gross Scope 1, Scope 2, and Scope 3 GHG emissions in metric tonnes of carbon dioxide equivalent (CO2e). Furthermore, both standards require the disclosure of location-based emissions for Scope 2 and the inclusion of specific Scope 3 categories in the measurement process. The covered greenhouse gases, consolidation approaches, and disclosure requirements for transparency are also harmonized.
While the core requirements align seamlessly, additional disclosures in GRI 305 and IFRS S2 can be aligned based on the choices a company makes. For instance, GRI 305 allows flexibility in choosing a GHG emissions accounting standard, but IFRS S2 mandates the application of the GHG Protocol Corporate Standard. A strategic decision to align with the GHG Protocol Corporate Standard can streamline disclosures across both standards. GRI 305 suggests using the Scope 3 categories from the GHG Protocol Corporate Value Chain Standard, while IFRS S2 requires their use. By electing to use these categories, companies can ensure conformity with both standards.
A comprehensive mapping of requirements for Scope 1, Scope 2, and Scope 3 GHG emissions across both standards reveals clear parallels. Understanding these alignments and distinctions is vital for companies aiming to harmonize their reporting practices and meet the expectations of stakeholders and investors. The outlined considerations provide a roadmap for organizations seeking to navigate the complex landscape of GHG emissions reporting under GRI and ISSB standards. As these standards evolve, it is essential for companies to stay informed and adapt their reporting practices accordingly.
With heightened corporate responsibility, the convergence of GRI 305 and IFRS S2 marks a significant step towards standardized and transparent GHG emissions reporting.
Impact Africa consulting limited is poised to help businesses through this landscape, ensuring not only compliance but also unlocking the inherent business value of sustainable practices. By offering strategic alignment services, integrated reporting solutions, training, and technological integration,
we aim to assist organizations in establishing themselves as influential drivers for positive transformation in the ever-evolving realm of sustainability reporting.
