The December 2025 amendments to IFRS S2

What do the IFRS S2 amendments change?

• Category 15 relief: a company with asset management, commercial banking or insurance activities may limit scope 3 category 15 to financed emissions, the emissions attributed to its loans, project finance, bonds, equity investments and undrawn loan commitments, and for asset managers the assets they manage. It may exclude emissions linked to derivatives, facilitated emissions, such as underwriting, and insurance-associated emissions.
• Industry classification: the requirement to use the Global Industry Classification Standard when disaggregating financed emissions is removed; the company chooses a system that gives useful information about transition risk exposure and explains its choice.
• Measurement method: where a jurisdiction or exchange requires a method other than the GHG Protocol for all or part of the company, it may use that method for the part affected.
• Global warming potentials: where a jurisdiction or exchange requires values other than the latest IPCC ones, the company may use them for the part affected.

See IFRS S2 climate disclosures.

IFRS S2 amendments in practice: a bank's category 15

A bank measures the emissions attributed to its lending and investments using the PCAF standard, in thousand tonnes of CO2 equivalent. See financed emissions and PCAF.

Applying the relief, the bank reports category 15 of 2,600 thousand tonnes, all financed emissions, and discloses the total of category 15 and the subtotal of financed emissions within it, here the same figure. It describes the activities it excluded, derivatives, underwriting and insurance, and how it defines a derivative for this purpose. It breaks down financed emissions by industry using the classification its banking regulator uses for climate stress tests, and explains why. Its insurance arm may use a different classification. See the 15 scope 3 categories.

How do the jurisdictional reliefs work?

IFRS S2 already allowed a company to use a different measurement method if a jurisdiction required it for the whole company. The amendments extend this to requirements that apply to only part of a company, and add the same relief for global warming potentials. For example, a group with an EU subsidiary reporting under the ESRS, or a Japanese subsidiary reporting under national rules, can use those methods or values for that subsidiary and the GHG Protocol and latest IPCC values for the rest. It discloses which parts use which method. See choosing emission factors and organisational boundaries.

When do the amendments apply?

For annual reporting periods beginning on or after 1 January 2027, with early application permitted. A company that has already applied IFRS S2 adjusts the comparative information for the preceding period as if the amendments had applied, unless that is impracticable. Australia's standard-setter approved matching amendments to AASB S2 on 15 December 2025, with the same effective date, and other jurisdictions that adopt IFRS S2 are expected to follow. The ISSB also amended the SASB Standards for asset management, commercial banks and insurance to match.

Why did the ISSB make these changes?

Banks and insurers told the ISSB that measuring emissions linked to derivatives, underwriting and insurance was not yet possible with reliable methods, and that GICS was costly and did not match how they manage risk. Groups subject to several regimes faced measuring the same emissions twice. The amendments keep the core requirement to report scope 1, 2 and 3 emissions while removing these obstacles, which the ISSB expects to make adoption easier. See ISSB transition reliefs and ISSB adoption by country.

This guide is general information. It is not tax or legal advice for your situation.