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Comparative Table with IFRS® Sustainability Disclosure Standard S1 General Requirements for Disclosure of Sustainability-related Financial Information
| Core content | Location | |
|---|---|---|
| Governance | ||
| 26 | The objective of sustainability-related financial disclosures on governance is to enable users of general purpose financial reports to understand the governance processes, controls and procedures an entity uses to monitor, manage and oversee sustainability-related risks and opportunities. | |
| 27 | To achieve this objective, an entity shall disclose information about: | |
| (a) | the governance body(s) (which can include a board, committee or equivalent body charged with governance) or individual(s) responsible for oversight of sustainability-related risks and opportunities. Specifically, the entity shall identify that body(s) or individual(s) and disclose information about: | |
(ⅰ) how responsibilities for sustainability-related risks and opportunities are reflected in the terms of reference, mandates, role descriptions and other related policies applicable to that body(s) or individual(s); |
Corporate Governance Report (547KB)PDFPDF |
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(ⅱ) how the body(s) or individual(s) determines whether appropriate skills and competencies are available or will be developed to oversee strategies designed to respond to sustainability-related risks and opportunities; |
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(ⅲ) how and how often the body(s) or individual(s) is informed about sustainability-related risks and opportunities; |
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(ⅳ) how the body(s) or individual(s) takes into account sustainability-related risks and opportunities when overseeing the entity’s strategy, its decisions on major transactions and its risk management processes and related policies, including whether the body(s) or individual(s) has considered trade-offs associated with those risks and opportunities; and |
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(ⅴ) how the body(s) or individual(s) oversees the setting of targets related to sustainability-related risks and opportunities, and monitors progress towards those targets (see paragraph 51), including whether and how related performance metrics are included in remuneration policies. |
Note: Relevant performance metrics are not included in remuneration policies. | |
| (b) | management’s role in the governance processes, controls and procedures used to monitor, manage and oversee sustainability-related risks and opportunities, including information about: | |
(ⅰ) whether the role is delegated to a specific management-level position or management-level committee and how oversight is exercised over that position or committee; and |
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(ⅱ) whether management uses controls and procedures to support the oversight of sustainability-related risks and opportunities and, if so, how these controls and procedures are integrated with other internal functions. |
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| Strategy | ||
| 28 | The objective of sustainability-related financial disclosures on strategy is to enable users of general purpose financial reports to understand an entity’s strategy for managing sustainability-related risks and opportunities. | |
| 29 | Specifically, an entity shall disclose information to enable users of general purpose financial reports to understand: | |
| (a) | the sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s prospects (see paragraphs 30–31); | |
| (b) | the current and anticipated effects of those sustainability-related risks and opportunities on the entity’s business model and value chain (see paragraph 32); | |
| (c) | the effects of those sustainability-related risks and opportunities on the entity’s strategy and decision-making (see paragraph 33); | |
| (d) | the effects of those sustainability-related risks and opportunities on the entity’s financial position, financial performance and cash flows for the reporting period, and their anticipated effects on the entity’s financial position, financial performance and cash flows over the short, medium and long term, taking into consideration how those sustainability-related risks and opportunities have been factored into the entityʼs financial planning (see paragraphs 34–40); and | |
| (e) | the resilience of the entity’s strategy and its business model to those sustainability-related risks (see paragraphs 41–42). | |
| Sustainability-related risks and opportunities | ||
| 30 | An entity shall disclose information that enables users of general purpose financial reports to understand the sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s prospects. Specifically, the entity shall: | |
| (a) | describe sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s prospects; | |
| (b) | specify the time horizons—short, medium or long term—over which the effects of each of those sustainability-related risks and opportunities could reasonably be expected to occur; and | - |
| (c) | explain how the entity defines ‘short term’, ‘medium term’ and ‘long term’ and how these definitions are linked to the planning horizons used by the entity for strategic decision-making. | - |
| 31 | Short-, medium- and long- term time horizons can vary between entities and depend on many factors, including industry-specific characteristics, such as cash flow, investment and business cycles, the planning horizons typically used in an entity’s industry for strategic decision-making and capital allocation plans, and the time horizons over which users of general purpose financial reports conduct their assessments of entities in that industry. | |
| Business model and value chain | ||
| 32 | An entity shall disclose information that enables users of general purpose financial reports to understand the current and anticipated effects of sustainability-related risks and opportunities on the entity’s business model and value chain. Specifically, the entity shall disclose: | |
| (a) | a description of the current and anticipated effects of sustainability-related risks and opportunities on the entity’s business model and value chain; and | |
| (b) | a description of where in the entity’s business model and value chain sustainability-related risks and opportunities are concentrated (for example, geographical areas, facilities and types of assets). | - |
| Strategy and decision-making | ||
| 33 | An entity shall disclose information that enables users of general purpose financial reports to understand the effects of sustainability-related risks and opportunities on its strategy and decision-making. Specifically, the entity shall disclose information about: | |
| (a) | how the entity has responded to, and plans to respond to, sustainability-related risks and opportunities in its strategy and decision-making; | |
| (b) | the progress against plans the entity has disclosed in previous reporting periods, including quantitative and qualitative information; and |
Medium-Term Management Program Contributing Solutions to Social Issues through Business Activities |
| (c) | trade-offs between sustainability-related risks and opportunities that the entity considered (for example, in making a decision on the location of new operations, an entity might have considered the environmental impacts of those operations and the employment opportunities they would create in a community). | - |
| Financial position, financial performance and cash flows | ||
| 34 | An entity shall disclose information that enables users of general purpose financial reports to understand: | |
| (a) | the effects of sustainability-related risks and opportunities on the entity’s financial position, financial performance and cash flows for the reporting period (current financial effects); and | |
| (b) | the anticipated effects of sustainability-related risks and opportunities on the entity’s financial position, financial performance and cash flows over the short, medium and long term, taking into consideration how sustainability-related risks and opportunities are included in the entity’s financial planning (anticipated financial effects). | |
| 35 | Specifically, an entity shall disclose quantitative and qualitative information about: | |
| (a) | how sustainability-related risks and opportunities have affected its financial position, financial performance and cash flows for the reporting period; | |
| (b) | the sustainability-related risks and opportunities identified in paragraph 35(a) for which there is a significant risk of a material adjustment within the next annual reporting period to the carrying amounts of assets and liabilities reported in the related financial statements; | - |
| (c) | how the entity expects its financial position to change over the short, medium and long term, given its strategy to manage sustainability-related risks and opportunities, taking into consideration: | |
(ⅰ) its investment and disposal plans (for example, plans for capital expenditure, major acquisitions and divestments, joint ventures, business transformation, innovation, new business areas, and asset retirements), including plans the entity is not contractually committed to; and |
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(ⅱ) its planned sources of funding to implement its strategy; and |
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| (d) | how the entity expects its financial performance and cash flows to change over the short, medium and long term, given its strategy to manage sustainability-related risks and opportunities. | |
| 36 | In providing quantitative information, an entity may disclose a single amount or a range. | |
| 37 | In preparing disclosures about the anticipated financial effects of a sustainability-related risk or opportunity, an entity shall: | |
| (a) | use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort (see paragraphs B8–B10); and | - |
| (b) | use an approach that is commensurate with the skills, capabilities and resources that are available to the entity for preparing those disclosures. | - |
| 38 | An entity need not provide quantitative information about the current or anticipated financial effects of a sustainability-related risk or opportunity if the entity determines that: | |
| (a) | those effects are not separately identifiable; or | |
| (b) | the level of measurement uncertainty involved in estimating those effects is so high that the resulting quantitative information would not be useful (see paragraphs 77–82). | |
| 39 | In addition, an entity need not provide quantitative information about the anticipated financial effects of a sustainability-related risk or opportunity if the entity does not have the skills, capabilities or resources to provide that quantitative information. | |
| 40 | If an entity determines that it need not provide quantitative information about the current or anticipated financial effects of a sustainability-related risk or opportunity applying the criteria set out in paragraphs 38–39, the entity shall: | |
| (a) | explain why it has not provided quantitative information; | - |
| (b) | provide qualitative information about those financial effects, including identifying line items, totals and subtotals within the related financial statements that are likely to be affected, or have been affected, by that sustainability-related risk or opportunity; and | |
| (c) | provide quantitative information about the combined financial effects of that sustainability-related risk or opportunity with other sustainability-related risks or opportunities and other factors unless the entity determines that quantitative information about the combined financial effects would not be useful. | - |
| Resilience | ||
| 41 | An entity shall disclose information that enables users of general purpose financial reports to understand its capacity to adjust to the uncertainties arising from sustainability-related risks. An entity shall disclose a qualitative and, if applicable, quantitative assessment of the resilience of its strategy and business model in relation to its sustainability-related risks, including information about how the assessment was carried out and its time horizon. When providing quantitative information, an entity may disclose a single amount or a range. | - |
| 42 | Other IFRS Sustainability Disclosure Standards may specify the type of information an entity is required to disclose about its resilience to specific sustainability-related risks and how to prepare those disclosures, including whether a scenario analysis is required. | - |
| Risk management | ||
| 43 | The objective of sustainability-related financial disclosures on risk management is to enable users of general purpose financial reports: | |
| (a) | to understand an entity’s processes to identify, assess, prioritise and monitor sustainability-related risks and opportunities, including whether and how those processes are integrated into and inform the entity’s overall risk management process; and | |
| (b) | to assess the entity’s overall risk profile and its overall risk management process. | |
| 44 | To achieve this objective, an entity shall disclose information about: | |
| (a) | the processes and related policies the entity uses to identify, assess, prioritise and monitor sustainability-related risks, including information about: | |
(ⅰ) the inputs and parameters the entity uses (for example, information about data sources and the scope of operations covered in the processes); |
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(ⅱ) whether and how the entity uses scenario analysis to inform its identification of sustainability-related risks; |
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(ⅲ) how the entity assesses the nature, likelihood and magnitude of the effects of those risks (for example, whether the entity considers qualitative factors, quantitative thresholds or other criteria); |
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(ⅳ) whether and how the entity prioritises sustainability-related risks relative to other types of risk; |
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(ⅴ) how the entity monitors sustainability-related risks; and |
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(ⅵ) whether and how the entity has changed the processes it uses compared with the previous reporting period; |
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| (b) | the processes the entity uses to identify, assess, prioritise and monitor sustainability-related opportunities; and | |
| (c) | the extent to which, and how, the processes for identifying, assessing, prioritising and monitoring sustainability-related risks and opportunities are integrated into and inform the entity’s overall risk management process. | - |
| Metrics and targets | ||
| 45 | The objective of sustainability-related financial disclosures on metrics and targets is to enable users of general purpose financial reports to understand an entity’s performance in relation to its sustainability-related risks and opportunities, including progress towards any targets the entity has set, and any targets it is required to meet by law or regulation. | |
| 46 | An entity shall disclose, for each sustainability-related risk and opportunity that could reasonably be expected to affect the entity’s prospects: | |
| (a) | metrics required by an applicable IFRS Sustainability Disclosure Standard; and | |
| (b) | metrics the entity uses to measure and monitor: | |
(ⅰ) that sustainability-related risk or opportunity; and |
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(ⅱ) its performance in relation to that sustainability-related risk or opportunity, including progress towards any targets the entity has set, and any targets it is required to meet by law or regulation. |
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| 47 | In the absence of an IFRS Sustainability Disclosure Standard that specifically applies to a sustainability-related risk or opportunity, an entity shall apply paragraphs 57–58 to identify applicable metrics. | |
| 48 | Metrics disclosed by an entity applying paragraphs 45–46 shall include metrics associated with particular business models, activities or other common features that characterise participation in an industry. | |
| 49 | If an entity discloses a metric taken from a source other than IFRS Sustainability Disclosure Standards, the entity shall identify the source and the metric taken. | |
| 50 | If a metric has been developed by an entity, the entity shall disclose information about: | |
| (a) | how the metric is defined, including whether it is derived by adjusting a metric taken from a source other than IFRS Sustainability Disclosure Standards and, if so, which source and how the metric disclosed by the entity differs from the metric specified in that source; |
Sustainability Innovation Business Expansion Project Initiatives for Sustainability Innovation Business and Product Promotion |
| (b) | whether the metric is an absolute measure, a measure expressed in relation to another metric or a qualitative measure (such as a red, amber, green—or RAG—status); | |
| (c) | whether the metric is validated by a third party and, if so, which party; and | - |
| (d) | the method used to calculate the metric and the inputs to the calculation, including the limitations of the method used and the significant assumptions made. | - |
| 51 | An entity shall disclose information about the targets it has set to monitor progress towards achieving its strategic goals, and any targets it is required to meet by law or regulation. For each target, the entity shall disclose: | |
| (a) | the metric used to set the target and to monitor progress towards reaching the target; | |
| (b) | the specific quantitative or qualitative target the entity has set or is required to meet; | |
| (c) | the period over which the target applies; | |
| (d) | the base period from which progress is measured; | |
| (e) | any milestones and interim targets; | |
| (f) | performance against each target and an analysis of trends or changes in the entity’s performance; and |
Contributing Solutions to Social Issues through Business Activities |
| (g) | any revisions to the target and an explanation for those revisions. | N/A |
| 52 | The definition and calculation of metrics, including metrics used to set the entity’s targets and monitor progress towards reaching them, shall be consistent over time. If a metric is redefined or replaced, an entity shall apply paragraph B52. | |
| 53 | An entity shall label and define metrics and targets using meaningful, clear and precise names and descriptions. | |
| General requirements | Location | |
|---|---|---|
| Sources of guidance | ||
| Identifying sustainability-related risks and opportunities | ||
| 54 | In identifying sustainability-related risks and opportunities that could reasonably be expected to affect an entity’s prospects, an entity shall apply IFRS Sustainability Disclosure Standards. | |
| 55 | In addition to IFRS Sustainability Disclosure Standards: | |
| (a) | an entity shall refer to and consider the applicability of the disclosure topics in the SASB Standards. An entity might conclude that the disclosure topics in the SASB Standards are not applicable in the entity’s circumstances. | |
| (b) | an entity may refer to and consider the applicability of: | |
(ⅰ) the CDSB Framework Application Guidance for Water-related Disclosures and the CDSB Framework Application Guidance for Biodiversity-related Disclosures (collectively referred to as ‘CDSB Framework Application Guidance’); |
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(ⅱ) the most recent pronouncements of other standard‑setting bodies whose requirements are designed to meet the information needs of users of general purpose financial reports; and |
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(ⅲ) the sustainability-related risks and opportunities identified by entities that operate in the same industry(s) or geographical region(s). |
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| Identifying applicable disclosure requirements | ||
| 56 | In identifying applicable disclosure requirements about a sustainability-related risk or opportunity that could reasonably be expected to affect an entity’s prospects, an entity shall apply the IFRS Sustainability Disclosure Standard that specifically applies to that sustainability-related risk or opportunity. | |
| 57 | In the absence of an IFRS Sustainability Disclosure Standard that specifically applies to a sustainability-related risk or opportunity, an entity shall apply judgement to identify information that: | |
| (a) | is relevant to the decision-making of users of general purpose financial reports; and | N/A |
| (b) | faithfully represents that sustainability-related risk or opportunity. | N/A |
| 58 | In making the judgement described in paragraph 57: | |
| (a) | an entity shall refer to and consider the applicability of the metrics associated with the disclosure topics included in the SASB Standards. An entity might conclude that the metrics specified in the SASB Standards are not applicable in the entity’s circumstances. | |
| (b) | an entity may—to the extent that these sources do not conflict with IFRS Sustainability Disclosure Standards—refer to and consider the applicability of: | |
(ⅰ) the CDSB Framework Application Guidance; |
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(ⅱ) the most recent pronouncements of other standard‑setting bodies whose requirements are designed to meet the information needs of users of general purpose financial reports; and |
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(ⅲ) the information, including metrics, disclosed by entities that operate in the same industry(s) or geographical region(s). |
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| (c) | an entity may—to the extent that these sources assist the entity in meeting the objective of this Standard (see paragraphs 1–4) and do not conflict with IFRS Sustainability Disclosure Standards—refer to and consider the applicability of the sources specified in Appendix C. | |
| Disclosure of information about sources of guidance | ||
| 59 | An entity shall identify: | |
| (a) | the specific standards, pronouncements, industry practice and other sources of guidance that the entity has applied in preparing its sustainability-related financial disclosures, including, if applicable, identifying the disclosure topics in the SASB Standards; and | |
| (b) | the industry(s) specified in the IFRS Sustainability Disclosure Standards, the SASB Standards or other sources of guidance relating to a particular industry(s) that the entity has applied in preparing its sustainability-related financial disclosures, including in identifying applicable metrics. | |
| Location of disclosures | ||
| 60 | An entity is required to provide disclosures required by IFRS Sustainability Disclosure Standards as part of its general purpose financial reports. | |
| 61 | Subject to any regulation or other requirements that apply to an entity, there are various possible locations in its general purpose financial reports in which to disclose sustainability-related financial information. Sustainability-related financial disclosures could be included in an entity’s management commentary or a similar report when it forms part of an entity’s general purpose financial reports. Management commentary or a similar report is a required report in many jurisdictions. It might be known by or included in reports with various names, such as ‘management report’, ‘management’s discussion and analysis’, ‘operating and financial review’, ‘integrated report’ or ‘strategic report’. | |
| 62 | An entity may disclose information required by an IFRS Sustainability Disclosure Standard in the same location as information disclosed to meet other requirements, such as information required by regulators. The entity shall ensure that the sustainability-related financial disclosures are clearly identifiable and not obscured by that additional information (see paragraph B27). | Note: Comparison tables have been prepared to support compliance with disclosure requirements. |
| 63 | Information required by an IFRS Sustainability Disclosure Standard may be included in sustainability-related financial disclosures by cross-reference to another report published by the entity. If an entity includes information by cross-reference, the entity shall apply the requirements in paragraphs B45–B47. | Note: Comparison tables have been prepared to support compliance with disclosure requirements. |
| Timing of reporting | ||
| 64 | An entity shall report its sustainability-related financial disclosures at the same time as its related financial statements. The entity’s sustainability-related financial disclosures shall cover the same reporting period as the related financial statements. | |
| 65 | Normally, an entity prepares sustainability-related financial disclosures for a 12-month period. However, for practical reasons, some entities prefer to report, for example, for a 52-week period. This Standard does not preclude that practice. | |
| 66 | When an entity changes the end of its reporting period and provides sustainability-related financial disclosures for a period longer or shorter than 12 months, it shall disclose: | |
| (a) | the period covered by the sustainability-related financial disclosures; | |
| (b) | the reason for using a longer or shorter period; and | - |
| (c) | the fact that the amounts disclosed in the sustainability-related financial disclosures are not entirely comparable. | - |
| 67 | If, after the end of the reporting period but before the date on which the sustainability-related financial disclosures are authorised for issue, an entity receives information about conditions that existed at the end of the reporting period, it shall update disclosures that relate to those conditions in the light of the new information. | Certain available information is updated as necessary before publication. |
| 68 | An entity shall disclose information about transactions, other events and conditions that occur after the end of the reporting period, but before the date on which the sustainability-related financial disclosures are authorised for issue, if non-disclosure of that information could reasonably be expected to influence decisions that primary users of general purpose financial reports make on the basis of those reports. | - |
| 69 | This Standard does not mandate which entities would be required to provide interim sustainability-related financial disclosures, how frequently, or how soon after the end of an interim period. However, governments, securities regulators, stock exchanges and accountancy bodies may require entities whose debt or equity securities are publicly traded to publish interim general purpose financial reports. If an entity is required or elects to publish interim sustainability-related financial disclosures in accordance with IFRS Sustainability Disclosure Standards, the entity shall apply paragraph B48. | |
| Comparative information | ||
| 70 | Unless another IFRS Sustainability Disclosure Standard permits or requires otherwise, an entity shall disclose comparative information in respect of the preceding period for all amounts disclosed in the reporting period. If such information would be useful for an understanding of the sustainability-related financial disclosures for the reporting period, the entity shall also disclose comparative information for narrative and descriptive sustainability-related financial information (see paragraphs B49–B59). | |
| 71 | Amounts reported in sustainability-related financial disclosures might relate, for example, to metrics and targets or to current and anticipated financial effects of sustainability-related risks and opportunities. | |
| Statement of compliance | ||
| 72 | An entity whose sustainability-related financial disclosures comply with all the requirements of IFRS Sustainability Disclosure Standards shall make an explicit and unreserved statement of compliance. An entity shall not describe sustainability-related financial disclosures as complying with IFRS Sustainability Disclosure Standards unless they comply with all the requirements of IFRS Sustainability Disclosure Standards. | |
| 73 | This Standard relieves an entity from disclosing information otherwise required by an IFRS Sustainability Disclosure Standard if law or regulation prohibits the entity from disclosing that information (see paragraph B33). This Standard also relieves an entity from disclosing information about a sustainability-related opportunity otherwise required by an IFRS Sustainability Disclosure Standard if that information is commercially sensitive as described in this Standard (see paragraphs B34–B37). An entity using these exemptions is not prevented from asserting compliance with IFRS Sustainability Disclosure Standards. | |
Comparative Table with IFRS® Sustainability Disclosure Standard S2 Climate-related Disclosures
| Core content | Location | |
|---|---|---|
| Governance | ||
| 5 | The objective of climate-related financial disclosures on governance is to enable users of general purpose financial reports to understand the governance processes, controls and procedures an entity uses to monitor, manage and oversee climate-related risks and opportunities. | |
| 6 | To achieve this objective, an entity shall disclose information about: | |
| (a) | the governance body(s) (which can include a board, committee or equivalent body charged with governance) or individual(s) responsible for oversight of climate-related risks and opportunities. Specifically, the entity shall identify that body(s) or individual(s) and disclose information about: | |
(ⅰ) how responsibilities for climate-related risks and opportunities are reflected in the terms of reference, mandates, role descriptions and other related policies applicable to that body(s) or individual(s); |
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(ⅱ) how the body(s) or individual(s) determines whether appropriate skills and competencies are available or will be developed to oversee strategies designed to respond to climate-related risks and opportunities; |
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(ⅲ) how and how often the body(s) or individual(s) is informed about climate-related risks and opportunities; |
Securities Report (available only in Japanese) |
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(ⅳ) how the body(s) or individual(s) takes into account climate-related risks and opportunities when overseeing the entity’s strategy, its decisions on major transactions and its risk management processes and related policies, including whether the body(s) or individual(s) has considered trade-offs associated with those risks and opportunities; and |
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(ⅴ) how the body(s) or individual(s) oversees the setting of targets related to climate-related risks and opportunities, and monitors progress towards those targets (see paragraphs 33–36), including whether and how related performance metrics are included in remuneration policies (see paragraph 29(g)). |
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| (b) | management’s role in the governance processes, controls and procedures used to monitor, manage and oversee climate-related risks and opportunities, including information about: | |
(ⅰ) whether the role is delegated to a specific management-level position or management-level committee and how oversight is exercised over that position or committee; and |
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(ⅱ) whether management uses controls and procedures to support the oversight of climate-related risks and opportunities and, if so, how these controls and procedures are integrated with other internal functions. |
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| 7 | In preparing disclosures to fulfil the requirements in paragraph 6, an entity shall avoid unnecessary duplication in accordance with IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) (see paragraph B42(b) of IFRS S1). For example, although an entity shall provide the information required by paragraph 6, if oversight of sustainability-related risks and opportunities is managed on an integrated basis, the entity would avoid duplication by providing integrated governance disclosures instead of separate disclosures for each sustainability-related risk and opportunity. | |
| Strategy | ||
| 8 | The objective of climate-related financial disclosures on strategy is to enable users of general purpose financial reports to understand an entity’s strategy for managing climate-related risks and opportunities. | |
| 9 | Specifically, an entity shall disclose information to enable users of general purpose financial reports to understand: | |
| (a) | the climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects (see paragraphs 10–12); | |
| (b) | the current and anticipated effects of those climate-related risks and opportunities on the entity’s business model and value chain (see paragraph 13); | |
| (c) | the effects of those climate-related risks and opportunities on the entity’s strategy and decision-making, including information about its climate-related transition plan (see paragraph 14); | |
| (d) | the effects of those climate-related risks and opportunities on the entity’s financial position, financial performance and cash flows for the reporting period, and their anticipated effects on the entity’s financial position, financial performance and cash flows over the short, medium and long term, taking into consideration how those climate-related risks and opportunities have been factored into the entity’s financial planning (see paragraphs 15–21); and | |
| (e) | the climate resilience of the entity’s strategy and its business model to climate-related changes, developments and uncertainties, taking into consideration the entity’s identified climate-related risks and opportunities (see paragraph 22). | |
| Climate-related risks and opportunities | ||
| 10 | An entity shall disclose information that enables users of general purpose financial reports to understand the climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects. Specifically, the entity shall: | |
| (a) | describe climate-related risks and opportunities that could reasonably be expected to affect the entity’s prospects; | |
| (b) | explain, for each climate-related risk the entity has identified, whether the entity considers the risk to be a climate-related physical risk or climate-related transition risk; | |
| (c) | specify, for each climate-related risk and opportunity the entity has identified, over which time horizons—short, medium or long term— the effects of each climate-related risk and opportunity could reasonably be expected to occur; and | - |
| (d) | explain how the entity defines ‘short term’, ‘medium term’ and ‘long term’ and how these definitions are linked to the planning horizons used by the entity for strategic decision-making. | - |
| 11 | In identifying the climate-related risks and opportunities that could reasonably be expected to affect an entity’s prospects, the entity shall use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future conditions. | |
| 12 | In identifying the climate-related risks and opportunities that could reasonably be expected to affect an entity’s prospects, the entity shall refer to and consider the applicability of the industry-based disclosure topics defined in the Industry-based Guidance on Implementing IFRS S2. | |
| Business model and value chain | ||
| 13 | An entity shall disclose information that enables users of general purpose financial reports to understand the current and anticipated effects of climate-related risks and opportunities on the entity’s business model and value chain. Specifically, the entity shall disclose: | |
| (a) | a description of the current and anticipated effects of climate-related risks and opportunities on the entity’s business model and value chain; and | |
| (b) | a description of where in the entity’s business model and value chain climate-related risks and opportunities are concentrated (for example, geographical areas, facilities and types of assets). | - |
| Strategy and decision-making | ||
| 14 | An entity shall disclose information that enables users of general purpose financial reports to understand the effects of climate-related risks and opportunities on its strategy and decision-making. Specifically, the entity shall disclose: | |
| (a) | information about how the entity has responded to, and plans to respond to, climate-related risks and opportunities in its strategy and decision-making, including how the entity plans to achieve any climate-related targets it has set and any targets it is required to meet by law or regulation. Specifically, the entity shall disclose information about: | |
(ⅰ) current and anticipated changes to the entity’s business model, including its resource allocation, to address climate-related risks and opportunities (for example, these changes could include plans to manage or decommission carbon-, energy- or water-intensive operations; resource allocations resulting from demand or supply-chain changes; resource allocations arising from business development through capital expenditure or additional expenditure on research and development; and acquisitions or divestments); |
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(ⅱ) current and anticipated direct mitigation and adaptation efforts (for example, through changes in production processes or equipment, relocation of facilities, workforce adjustments, and changes in product specifications); |
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(ⅲ) current and anticipated indirect mitigation and adaptation efforts (for example, through working with customers and supply chains); |
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(ⅳ) any climate-related transition plan the entity has, including information about key assumptions used in developing its transition plan, and dependencies on which the entity’s transition plan relies; and |
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(ⅴ) how the entity plans to achieve any climate-related targets, including any greenhouse gas emissions targets, described in accordance with paragraphs 33–36. |
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| (b) | information about how the entity is resourcing, and plans to resource, the activities disclosed in accordance with paragraph 14(a). | |
| (c) | quantitative and qualitative information about the progress of plans disclosed in previous reporting periods in accordance with paragraph 14(a). |
Contributing Solutions to Social Issues through Business Activities |
| Financial position, financial performance and cash flows | ||
| 15 | An entity shall disclose information that enables users of general purpose financial reports to understand: | |
| (a) | the effects of climate-related risks and opportunities on the entity’s financial position, financial performance and cash flows for the reporting period (current financial effects); and | |
| (b) | the anticipated effects of climate-related risks and opportunities on the entity’s financial position, financial performance and cash flows over the short, medium and long term, taking into consideration how climate-related risks and opportunities are included in the entity’s financial planning (anticipated financial effects). | |
| 16 | Specifically, an entity shall disclose quantitative and qualitative information about: | |
| (a) | how climate-related risks and opportunities have affected its financial position, financial performance and cash flows for the reporting period; | |
| (b) | the climate-related risks and opportunities identified in paragraph 16(a) for which there is a significant risk of a material adjustment within the next annual reporting period to the carrying amounts of assets and liabilities reported in the related financial statements; | |
| (c) | how the entity expects its financial position to change over the short, medium and long term, given its strategy to manage climate-related risks and opportunities, taking into consideration: | |
(ⅰ) its investment and disposal plans (for example, plans for capital expenditure, major acquisitions and divestments, joint ventures, business transformation, innovation, new business areas, and asset retirements), including plans the entity is not contractually committed to; and |
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(ⅱ) its planned sources of funding to implement its strategy; and |
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| (d) | how the entity expects its financial performance and cash flows to change over the short, medium and long term, given its strategy to manage climate-related risks and opportunities (for example, increased revenue from products and services aligned with a lower-carbon economy; costs arising from physical damage to assets from climate events; and expenses associated with climate adaptation or mitigation). | |
| 17 | In providing quantitative information, an entity may disclose a single amount or a range. | |
| 18 | In preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity, an entity shall: | |
| (a) | use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort; and | |
| (b) | use an approach that is commensurate with the skills, capabilities and resources that are available to the entity for preparing those disclosures. | |
| 19 | An entity need not provide quantitative information about the current or anticipated financial effects of a climate-related risk or opportunity if the entity determines that: | |
| (a) | those effects are not separately identifiable; or | |
| (b) | the level of measurement uncertainty involved in estimating those effects is so high that the resulting quantitative information would not be useful. | |
| 20 | In addition, an entity need not provide quantitative information about the anticipated financial effects of a climate-related risk or opportunity if the entity does not have the skills, capabilities or resources to provide that quantitative information. | |
| 21 | If an entity determines that it need not provide quantitative information about the current or anticipated financial effects of a climate-related risk or opportunity applying the criteria set out in paragraphs 19–20, the entity shall: | |
| (a) | explain why it has not provided quantitative information; | |
| (b) | provide qualitative information about those financial effects, including identifying line items, totals and subtotals within the related financial statements that are likely to be affected, or have been affected, by that climate-related risk or opportunity; and | |
| (c) | provide quantitative information about the combined financial effects of that climate-related risk or opportunity with other climate-related risks or opportunities and other factors unless the entity determines that quantitative information about the combined financial effects would not be useful. | |
| Climate resilience | ||
| 22 | An entity shall disclose information that enables users of general purpose financial reports to understand the resilience of the entity’s strategy and business model to climate-related changes, developments and uncertainties, taking into consideration the entity’s identified climate-related risks and opportunities. The entity shall use climate-related scenario analysis to assess its climate resilience using an approach that is commensurate with the entity’s circumstances (see paragraphs B1–B18). In providing quantitative information, the entity may disclose a single amount or a range. Specifically, the entity shall disclose: | |
| (a) | the entity’s assessment of its climate resilience as at the reporting date, which shall enable users of general purpose financial reports to understand: | |
(ⅰ) the implications, if any, of the entity’s assessment for its strategy and business model, including how the entity would need to respond to the effects identified in the climate-related scenario analysis; |
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(ⅱ) the significant areas of uncertainty considered in the entity’s assessment of its climate resilience; |
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(ⅲ) the entity’s capacity to adjust or adapt its strategy and business model to climate change over the short, medium and long term, including; |
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| (b) | how and when the climate-related scenario analysis was carried out, including: | |
(ⅰ) information about the inputs the entity used, including: |
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(ⅱ) the key assumptions the entity made in the analysis, including assumptions about: |
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(ⅲ) the reporting period in which the climate-related scenario analysis was carried out (see paragraph B18). |
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| 23 | In preparing disclosures to meet the requirements in paragraphs 13–22, an entity shall refer to and consider the applicability of cross-industry metric categories, as described in paragraph 29, and industry-based metrics associated with disclosure topics defined in the Industry-based Guidance on Implementing IFRS S2 as described in paragraph 32. | |
| Risk management | ||
| 24 | The objective of climate-related financial disclosures on risk management is to enable users of general purpose financial reports to understand an entity’s processes to identify, assess, prioritise and monitor climate-related risks and opportunities, including whether and how those processes are integrated into and inform the entity’s overall risk management process. | |
| 25 | To achieve this objective, an entity shall disclose information about: | |
| (a) | the processes and related policies the entity uses to identify, assess, prioritise and monitor climate-related risks, including information about: | |
(ⅰ) the inputs and parameters the entity uses (for example, information about data sources and the scope of operations covered in the processes); |
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(ⅱ) whether and how the entity uses climate-related scenario analysis to inform its identification of climate-related risks; |
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(ⅲ) how the entity assesses the nature, likelihood and magnitude of the effects of those risks (for example, whether the entity considers qualitative factors, quantitative thresholds or other criteria); |
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(ⅳ) whether and how the entity prioritises climate-related risks relative to other types of risk; |
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(ⅴ) how the entity monitors climate-related risks; and |
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(ⅵ) whether and how the entity has changed the processes it uses compared with the previous reporting period; |
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| (b) | the processes the entity uses to identify, assess, prioritise and monitor climate-related opportunities, including information about whether and how the entity uses climate-related scenario analysis to inform its identification of climate-related opportunities; and | |
| (c) | the extent to which, and how, the processes for identifying, assessing, prioritising and monitoring climate-related risks and opportunities are integrated into and inform the entity’s overall risk management process. | |
| 26 | In preparing disclosures to fulfil the requirements in paragraph 25, an entity shall avoid unnecessary duplication in accordance with IFRS S1 (see paragraph B42(b) of IFRS S1). For example, although an entity shall provide the information required by paragraph 25, if oversight of sustainability-related risks and opportunities is managed on an integrated basis, the entity would avoid duplication by providing integrated risk management disclosures instead of separate disclosures for each sustainability-related risk and opportunity. | |
| Metrics and targets | ||
| 27 | The objective of climate-related financial disclosures on metrics and targets is to enable users of general purpose financial reports to understand an entity’s performance in relation to its climate-related risks and opportunities, including progress towards any climate-related targets it has set, and any targets it is required to meet by law or regulation. | |
| 28 | To achieve this objective, an entity shall disclose: | |
| (a) | information relevant to the cross-industry metric categories (see paragraphs 29–31); | |
| (b) | industry-based metrics that are associated with particular business models, activities or other common features that characterise participation in an industry (see paragraph 32); and | |
| (c) | targets set by the entity, and any targets it is required to meet by law or regulation, to mitigate or adapt to climate-related risks or take advantage of climate-related opportunities, including metrics used by the governance body or management to measure progress towards these targets (see paragraphs 33–37). | |
| 29 | An entity shall disclose information relevant to the cross-industry metric categories of: | |
| (a) | greenhouse gases—the entity shall: | |
(ⅰ) disclose its absolute gross greenhouse gas emissions generated during the reporting period, expressed as metric tonnes of CO2 equivalent (see paragraphs B19–B22), classified as: |
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(ⅱ) measure its greenhouse gas emissions in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) unless required by a jurisdictional authority or an exchange on which the entity is listed to use a different method for measuring its greenhouse gas emissions (see paragraphs B23–B25); |
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(ⅲ) disclose the approach it uses to measure its greenhouse gas emissions (see paragraphs B26–B29) including: |
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(ⅳ) for Scope 1 and Scope 2 greenhouse gas emissions disclosed in accordance with paragraph 29(a)(i)(1)–(2), disaggregate
emissions between: |
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(ⅴ) for Scope 2 greenhouse gas emissions disclosed in accordance with paragraph 29(a)(i)(2), disclose its location-based Scope 2 greenhouse gas emissions, and provide information about any contractual instruments that is necessary to inform users’ understanding of the entity’s Scope 2 greenhouse gas emissions (see paragraphs B30–B31); and |
Toray Group’s Approach to Climate Change [CDP questionnaire (available only in Japanese)] |
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(ⅵ) for Scope 3 greenhouse gas emissions disclosed in accordance with paragraph 29(a)(i)(3), and with reference to paragraphs B32–B57, disclose: |
Managing Energy Use and Reducing Greenhouse Gas Emissions Toray Group’s Approach to Climate Change [CDP questionnaire (available only in Japanese)] |
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| (b) | climate-related transition risks—the amount and percentage of assets or business activities vulnerable to climate-related transition risks; | - |
| (c) | climate-related physical risks—the amount and percentage of assets or business activities vulnerable to climate-related physical risks; | - |
| (d) | climate-related opportunities—the amount and percentage of assets or business activities aligned with climate-related opportunities; | |
| (e) | capital deployment—the amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities; | |
| (f) | internal carbon prices—the entity shall disclose: | |
(ⅰ) an explanation of whether and how the entity is applying a carbon price in decision-making (for example, investment decisions, transfer pricing and scenario analysis); and |
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(ⅱ) the price for each metric tonne of greenhouse gas emissions the entity uses to assess the costs of its greenhouse gas emissions; |
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| (g) | remuneration—the entity shall disclose: | |
(ⅰ) a description of whether and how climate-related considerations are factored into executive remuneration (see also paragraph 6(a)(v)); and |
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(ⅱ) the percentage of executive management remuneration recognised in the current period that is linked to climate-related considerations. |
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| 30 | In preparing disclosures to meet the requirements in paragraph 29(b)–(d), an entity shall use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort. | |
| 31 | In preparing disclosures to meet the requirements in paragraph 29(b)–(g), an entity shall refer to paragraphs B64–B65. | |
| 32 | An entity shall disclose industry-based metrics that are associated with one or more particular business models, activities or other common features that characterise participation in an industry. In determining the industry-based metrics that the entity discloses, the entity shall refer to and consider the applicability of the industry-based metrics associated with disclosure topics described in the Industry-based Guidance on Implementing IFRS S2. | |
| 33 | An entity shall disclose the quantitative and qualitative climate-related targets it has set to monitor progress towards achieving its strategic goals, and any targets it is required to meet by law or regulation, including any greenhouse gas emissions targets. For each target, the entity shall disclose: | |
| (a) | the metric used to set the target (see paragraphs B66–B67); | |
| (b) | the objective of the target (for example, mitigation, adaptation or conformance with science-based initiatives); | - |
| (c) | the part of the entity to which the target applies (for example, whether the target applies to the entity in its entirety or only a part of the entity, such as a specific business unit or specific geographical region); | |
| (d) | the period over which the target applies; | |
| (e) | the base period from which progress is measured; | |
| (f) | any milestones and interim targets; | |
| (g) | if the target is quantitative, whether it is an absolute target or an intensity target; and | |
| (h) | how the latest international agreement on climate change, including jurisdictional commitments that arise from that agreement, has informed the target. | - |
| 34 | An entity shall disclose information about its approach to setting and reviewing each target, and how it monitors progress against each target, including: | |
| (a) | whether the target and the methodology for setting the target has been validated by a third party; | |
| (b) | the entity’s processes for reviewing the target; |
Contributing Solutions to Social Issues through Business Activities |
| (c) | the metrics used to monitor progress towards reaching the target; and | |
| (d) | any revisions to the target and an explanation for those revisions. | N/A |
| 35 | An entity shall disclose information about its performance against each climate-related target and an analysis of trends or changes in the entity’s performance. | |
| 36 | For each greenhouse gas emissions target disclosed in accordance with paragraphs 33–35, an entity shall disclose: | |
| (a) | which greenhouse gases are covered by the target. | |
| (b) | whether Scope 1, Scope 2 or Scope 3 greenhouse gas emissions are covered by the target. | Note: No targets have been set for Scope 3 emissions. |
| (c) | whether the target is a gross greenhouse gas emissions target or net greenhouse gas emissions target. If the entity discloses a net greenhouse gas emissions target, the entity is also required to separately disclose its associated gross greenhouse gas emissions target (see paragraphs B68–B69). | |
| (d) | whether the target was derived using a sectoral decarbonisation approach. | - |
| (e) | the entity’s planned use of carbon credits to offset greenhouse gas emissions to achieve any net greenhouse gas emissions target. In explaining its planned use of carbon credits the entity shall disclose information including, and with reference to paragraphs B70–B71: | |
(ⅰ) the extent to which, and how, achieving any net greenhouse gas emissions target relies on the use of carbon credits; |
Toray Group’s Approach to Climate Change [CDP questionnaire (available only in Japanese)] |
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(ⅱ) which third-party scheme(s) will verify or certify the carbon credits; |
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(ⅲ) the type of carbon credit, including whether the underlying offset will be nature-based or based on technological carbon removals, and whether the underlying offset is achieved through carbon reduction or removal; and |
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(ⅳ) any other factors necessary for users of general purpose financial reports to understand the credibility and integrity of the carbon credits the entity plans to use (for example, assumptions regarding the permanence of the carbon offset). |
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| 37 | In identifying and disclosing the metrics used to set and monitor progress towards reaching a target described in paragraphs 33–34, an entity shall refer to and consider the applicability of cross-industry metrics (see paragraph 29) and industry-based metrics (see paragraph 32), including those described in an applicable IFRS Sustainability Disclosure Standard, or metrics that otherwise satisfy the requirements in IFRS S1. | |