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TAC Public Meeting September 2024: Meeting Summary

Logo for the UK Sustainability Disclosure Technical Advisory Committee.

PUBLIC MEETING SUMMARY

Date: 03 September 2024

Time: 10:30–16:30

Location: FRC Office, 8th Floor, 125 London Wall, London, EC2Y 5AS

The recording of the meeting and agenda papers are available online.

Attendance

Name Designation
Sally Duckworth Chair
David Harris Member
Dia Desai Member
Harriet Cullum Member
Hilary Eastman Member
Jeremy Osborn Member
Joseph Noss Member (absent from mid Agenda Item 4)
Madeleine Evans Member
Peter Hogarth Member
Scott Barlow Member
Supriya Sobti Member (absent for Agenda Item 3 and beginning of Agenda Item 4)
Jenny Carter Member appointed by the Financial Reporting Council (FRC)
Paul Lee Member appointed by the UK Endorsement Board (UKEB)
Daniel Makevic Observer from the Department for Business and Trade (DBT)
Mita Gandhi Observer from the Bank of England (BoE)
Carlos Martin Tornero Observer from the Financial Conduct Authority (FCA)
Sarah-Jayne Dominic Secretariat

Private meeting

The TAC held a private meeting at 09.30 to 10.30 to discuss confidential and administrative matters.

1 Welcome and apologies

The Chair welcomed members and observers to the September meeting of the TAC.

The Chair noted that the TAC was quorate and read out the attendees—both in person and online.

The Chair asked the members to declare any interest in the agenda items. Interests were declared by Dia Desai, Hilary Eastman and David Harris. Dia Desai declared interest in Agenda Item 4: Financed emissions, as the HSBC representative to the PCAF Core Team. Hilary Eastman declared interest in Agenda Items 2, 3 and 4 as a member of the Technical Working Group of the E-Liability Institute. David Harris declared interest in Agenda Item 4 as an employee of the London Stock Exchange Group, which calculates and commercialises industry classification systems.

The TAC began by discussing Agenda Paper 6 which lists key updates since the July meeting. This paper was for information only and no decisions were required of the TAC. The TAC had no comments on the paper.

2 GHG emissions: GHG Protocol and measurement methods

The TAC considered Agenda Paper 2 on the GHG Protocol and measurement methods.

This paper considered the requirements in IFRS S2 Climate-related Disclosures (IFRS S2) relating to the measurement methods used to calculate greenhouse gas emissions. This included the reference to, and the requirements related to, the GHG Protocol Corporate Accounting and Reporting Standard. The TAC was asked to consider these requirements, including whether the instruction to use the GHG Protocol Corporate Accounting and Reporting Standard is appropriate. The TAC was asked the following questions.

  • Does the TAC agree with the analysis in this paper in relation to the requirements related to the GHG Protocol and measurement methods in IFRS S2?
  • Does the TAC agree to tentatively recommend to maintain the reference to the GHG Protocol Corporate Standard but change the instruction to 'shall consider measuring' temporarily until the ongoing review process by the GHG Protocol has been completed?
  • If the answer to this question is 'yes', does the TAC agree to tentatively recommend to remove the transition relief in IFRS S2 paragraph C4(a)?
  • Does the TAC agree to tentatively recommend to maintain flexibility in the reporting boundaries but encourage entities to use a financial control approach, in addition to engaging with the ISSB and GHG Protocol?
  • Does the TAC agree to tentatively recommend to request further clarification and guidance from the ISSB on the requirement to disaggregate Scope 1 and Scope 2 emissions between the consolidated accounting group and other investees?
  • Does the TAC agree to tentatively recommend to suggest that the UK Government review the process for updating the greenhouse gas conversion factors, including providing clear rationale as to why the latest GWP values are not used?
  • Does the TAC agree to tentatively recommend to encourage UK entities to also provide market-based Scope 2 emissions data alongside the location-based data? Does the TAC also tentatively recommend that market practice is observed and, in time, feedback is provided to the ISSB during its post-implementation review of IFRS S2 as to whether the Scope 2 market-based approach should be included in the standard?
  • Does the TAC agree to tentatively recommend to engage with both the GHG Protocol and ISSB to ensure that the requirements relating to Scope 2 emissions are consistent between the GHG Protocol materials and IFRS S2?

The TAC discussion covered the following points:

  • TAC members expressed a range of views regarding the suggested recommendation to maintain the reference to the GHG Protocol Corporate Standard but change the instruction to 'shall consider measuring' temporarily until the ongoing review process by the GHG Protocol has been completed. Members generally agreed that the lack of technical assessment of the GHG Protocol Corporate Standard and its need for update from the currently fixed 2004 version was concerning. However, the committee in general agreed that it is the most suitable existing option for measuring GHG emissions and that its consistent use should therefore be supported. The committee considered whether its mandated use should be delayed until a technical assessment has been completed by the ISSB, but on balance decided this may lead to the UK being out of step with best practice and damaging progress towards the global baseline. Instead it was suggested that DBT may carry out a post-implementation review of the UK Standards which could cover the matter of the GHG Protocol Corporate Standard.
  • There should be engagement with the ISSB on the misalignment present between IFRS S1 and IFRS S2 and ESRS regarding the approach to disaggregation.
  • That financial control boundaries would be the most preferred approach to reporting GHG emissions to support connectivity between financial and sustainability reporting. This was agreed to be the most useful approach for primary users. However, information based on operational control boundaries was also understood to be useful additional information and as such the committee supported maintaining a flexible approach with 'encouragement' towards a financial control approach.
  • Regarding the provision of market-based and/or location-based data, that mandating location-based information would support consistency in reporting, but noted that lots of UK entities are currently reporting both which is the most helpful approach for primary users. As such, a flexible approach appears appropriate and in-line with current market practice.
  • Regarding both the reporting boundaries and the market-based and location-based data, the TAC reflected on the meaning of the word 'encourage' and what this may look like in practice. Ultimately it was referred to DBT to consider mechanisms for encouragement, and it was suggested that a post-implementation review may help to illuminate what encouragement might look like.

The tentative endorsement recommendations in the paper are:

  • to maintain the reference to the GHG Protocol Corporate Standard but change the instruction to 'shall consider measuring' temporarily until the ongoing review process by the GHG Protocol has been completed.
  • if the recommendation in paragraph 52.1 is approved, to remove the transition relief in IFRS S2 paragraph C4(a) permitting entities to use a different method in the first year the standard is applied.
  • to maintain flexibility in reporting boundaries but encourage entities to use a financial control approach, in addition to engaging with the ISSB and GHG Protocol.
  • to request further clarification and guidance from the ISSB on the requirement to disaggregate Scope 1 and Scope 2 emissions between the consolidated accounting group and other investees.
  • to suggest that the UK Government review the process for updating the greenhouse gas conversion factors, including providing clear rationale as to why the latest GWP values are not used.
  • to encourage UK entities to also provide market-based Scope 2 emissions data alongside the location-based data. The TAC may also consider recommending that market practice is observed and, in time, feedback is provided to the ISSB during its post-implementation review of IFRS S2 as to whether the Scope 2 market-based approach should be included in the standard.
  • to engage with both the GHG Protocol and ISSB to ensure that the requirements relating to Scope 2 emissions are consistent between the GHG Protocol materials and IFRS S2.

Although not unanimous, on balance the TAC agreed to maintain the reference to the GHG Protocol Corporate Standard, without changing the instruction to 'shall consider measuring'. The TAC would also like to raise in its final advice a number of concerns regarding the current use of the GHG Protocol Corporate Standard within IFRS S2. These concerns regard the lack of technical analysis by the ISSB on the GHG Protocol Corporate Standard to date, that the GHG Protocol Corporate Standard was not originally designed to operate as a reporting standard and therefore requires a review of its governance processes as well as its content, and the need to update the GHG Protocol Corporate Standard from the currently fixed 2004 version. The TAC would recommend engaging with both the ISSB and GHG Protocol to ensure a review of the GHG Protocol Corporate Standard and its governance is undertaken thoroughly and swiftly to ensure its suitability as part of IFRS S2.

Since the TAC did not agree to amend the instruction to ‘shall consider measuring', it also rejected the suggested recommendation to remove the transition relief in IFRS S2 paragraph C4(a) permitting entities to use a different method in the first year the standard is applied.

The TAC agreed to maintain flexibility in the reporting boundaries, but to encourage entities to use a financial control approach, in addition to engaging with the ISSB and GHG Protocol. The TAC also recommends that DBT produce best practice guidelines as a means to encouraging a financial control approach including a timeline towards adopting a financial control approach.

The TAC agreed to request further clarification and guidance from the ISSB on the requirement to disaggregate Scope 1 and Scope 2 emissions between the consolidated accounting group and other investees. The TAC also agreed to encourage the ISSB to engage with EFRAG regarding the discrepancies present between IFRS S2 and ESRS E1.

The TAC agreed to suggest that the UK Government review the process for updating the greenhouse gas conversion factors, including providing clear rationale as to why the latest GWP values are not used. The TAC also agreed to recommend the Government look at the potential opportunity to cross apply certain government required emissions data for usage in corporate reporting processes; including that collected for its National Inventory Reports and in future from the UK Carbon Border Adjustment Mechanism.

The TAC agreed that market-based Scope 2 emissions data alongside the location-based data would be helpful and should be encouraged. The TAC also agreed to recommend that entities should state why they have chosen the approach they have. The TAC agreed with the recommendation that market practice is observed and, in time, feedback is provided to the ISSB during its post-implementation review of IFRS S2 is a general recommendation across all matters.

The TAC agreed to engage with both the GHG Protocol and ISSB on the revisions to the GHG Protocol Corporate Standard in general, to ensure alignment with the principles in IFRS S1.

3 GHG emissions: Scope 3

The TAC considered Agenda Paper 3 on Scope 3 GHG emissions.

This paper considered the requirements in IFRS S2 Climate-related Disclosures (IFRS S2) relating to the disclosure of Scope 3 emissions, including a discussion about the Scope 3 categories and the support mechanisms provided for in IFRS S2. The TAC was asked to consider whether UK entities are able to provide Scope 3 emissions disclosure and whether the support mechanisms are sufficient to support entities disclosing their Scope 3 emissions. The TAC was asked the following questions.

  • Does the TAC agree with the analysis in this paper in relation to Scope 3 emissions requirements in IFRS S1?
  • Does the TAC agree to tentatively recommend to maintain the requirements in IFRS S2 requiring the disclosure of absolute gross Scope 3 emissions?
  • Does the TAC agree to tentatively recommend to insert a requirement in IFRS S2 requiring further disaggregation of Scope 3 emissions data by Scope 3 category?
  • Does the TAC agree to tentatively recommend to engage with the ISSB in relation to improving the industry-based guidance to support entities in reporting their Scope 3 emissions data?
  • Does the TAC agree to tentatively recommend to engage with the GHG Protocol during its review of its materials to provide insight into UK views relating to Scope 3 categories—including the treatment of leased assets—and to support improvements to the GHG Protocol materials?
  • Does the TAC agree with the conclusions in paragraph 43–44 and agree to feed this back to DBT?

The TAC discussion covered the following points:

  • The interplay between Scope 3 reporting and the requirements to revise past period information raises a number of questions considering the level of estimation present within Scope 3 reporting and the difficulty of tracking when small changes across a large number of counterparties constitutes a material change for the reporting entity. Guidance clarifying when restatements of Scope 3 information should take place would be useful.
  • Complications may arise when entities within the value chain change their financial year end, leading to a longer or shorter reporting period. It is unclear whether the ISSB would support data being pro-rated in this instance.
  • The TAC questioned what might be defined as an acceptable time lag in reporting Scope 3 information. This will be discussed when the TAC discusses timing and location in October.
  • The value of narrative reporting in incidences both of differences in reporting period length and in exceptional time lags in reporting Scope 3 information. The TAC also recognised that it will be important for entities to disclose the methodology used when reporting Scope 3 information.
  • That disaggregating Scope 3 information by Scope 3 category is important, and should not add any burden on reporting entities as data is usually aggregated upwards. Under the guiding principles in IFRS S1, disaggregation should not be required unless material, and the TAC discussed whether an implementation guide may be useful to outline when disaggregation should be undertaken. However, IFRS S1 Paragraphs 29 and 30 were found to be instructive, with recognition that just because information has shared characteristics that does not mean it is comparable for example, water drawn from abundant versus stressed geographies, or GHG emissions across different categories where different actions may need to be taken to address emissions.
  • Regarding industry-based guidance, the TAC recommended engagement with the GHG Protocol and ISSB to suggest more prescriptive guidance on which Scope 3 categories may be most relevant to different industries, to encourage consistency of reporting within industries.

The tentative endorsement recommendations in the paper are:

  • to maintain the requirements in IFRS S2 requiring the disclosure of absolute gross Scope 3 emissions.
  • to insert a requirement in IFRS S2 requiring further disaggregation of Scope 3 emissions data by Scope 3 category.
  • to engage with the ISSB in relation to improving the industry-based guidance to support entities in reporting their Scope 3 emissions data.
  • to engage with the GHG Protocol during its review of its materials to provide insight into UK views relating to Scope 3 categories—including the treatment of leased assets—and to support improvements to the GHG Protocol materials.

The suggested responses to DBT's request are:

  • to conclude that public interest entities in the UK should already have the capacity, skills and systems to produce Scope 3 emissions disclosures, although further progress is needed to ensure this data is ‘reliable'.
  • to conclude that Scope 3 guidance and data infrastructure should be developed by an international body, like the GHG Protocol, which may be more appropriate than UK-specific guidance.

The TAC agreed to recommend to maintain the requirements in IFRS S2 requiring the disclosure of absolute gross Scope 3 emissions.

The TAC rejected the tentative recommendation to insert a requirement in IFRS S2 requiring further disaggregation of Scope 3 emissions data by Scope 3 category, noting that IFRS S1 paragraphs B29 and B30 cover the principles for disaggregation, and recommending instead to engage with the GHG Protocol and ISSB seeking further guidance and focusing on the industry-based relevance of the Scope 3 categories. The TAC also agreed to engage with the GHG Protocol during its review of its materials to provide insight into UK views relating to Scope 3 categories—including the treatment of leased assets—and to support improvements to the GHG Protocol materials.

Further, the TAC again highlighted the importance of carrying out a post-implementation review to consider this issue.

The TAC agreed with the suggested response to DBT, noting that Scope 3 reporting is difficult to produce and that entities will need significant support learning how to report reliable Scope 3 information. The TAC recommended that if guidance is open and transparent about the challenges of reporting Scope 3 information, this will also support investors in understanding the limits of Scope 3 reporting. The TAC also suggested that guidance points to narrative reporting as a useful approach to provide additional meaning, context and insight to Scope 3 reporting.

4 GHG emissions: financed emissions

The TAC considered Agenda Paper 4 on financed emissions.

This paper presented an analysis for consideration by the TAC of the financed emissions provisions set out in IFRS S2 Climate-related Disclosures. This paper set out the challenges in relation to disclosing financed emissions in accordance with IFRS S2. The TAC was asked to consider the following questions.

  • Does the TAC agree with the analysis in this paper in relation to the financed emissions provisions in IFRS S2?
  • Does the TAC tentatively agree to maintain the provisions related to financed emissions in IFRS S2?
  • Does the TAC tentatively agree to recommend to the ISSB that the expected level of coverage of emissions included in financed emissions disclosures be considered as part of industry-based standards as they are developed?
  • Does the TAC tentatively agree to note in its advice that consistent with IFRS S1 paragraph B29 entities should disaggregate their assets under management financed emissions disclosures by assets that are owned and controlled by the entity and by assets are not owned or controlled by the entity?
  • Does the TAC tentatively agree to note in it is advice that UK stakeholders have suggested that the development of frameworks for the calculation of financed emissions for different financial products should be an area for continued monitoring as practice is established?
  • Does the TAC tentatively agree to note in its advice that the use of the GICS should be an area for continued monitoring to provide feedback to the ISSB when they conduct the post-implementation review of IFRS S2?
  • Does the TAC tentatively agree to note in its advice that in accordance with IFRS S2 paragraph 29(a)(iii) entities should disclose appropriate explanation and context as to why disaggregated financed emissions figures are disclosed?
  • Does the TAC tentatively agree to note in its advice the September 2024 TIG discussion on financed emissions related to undrawn facilities should be followed and that the application of requirement should be monitored?

The TAC discussions covered the following points.

  • In relation to the financed emissions disclosures of assets under management, whether an entity owns or controls another entity should be aligned with the financial accounting treatment.
  • It is the TAC's view that as currently drafted, it is not possible for a financial services institution to meet the financed emissions requirements set out in IFRS S2. Paragraph 64 of IFRS S1 states that ‘the entity's sustainability related financial disclosures shall cover the same reporting period as the related financial statements.' At the reporting date, the loans and investments reported relate to the entity's prior year's balance sheet. However the financed emissions data will not relate to that same reporting period, but to a balance sheet from a year or two years earlier.
  • IFRS S2 paragraph B19 permits a reporting entity to include information in its financed emissions disclosures that is not aligned with its reporting period, when that information is obtained from entities in its value chain with a different reporting period. However this permission does not provide any relief in relation to the requirement in paragraph 64 of IFRS S1. As currently drafted therefore, with the inevitable delay in obtaining financed emissions data, it is not possible for any entity to make these disclosures and comply with paragraph 64 of IFRS S1.
  • This issue should be raised with the ISSB to seek clarity on how entities should address this problem. A possible approach would be an allowance/exemption for financed emissions disclosures from paragraph 64 of IFRS S1 for financial services institutions; and potentially some guidance material on how to address the timing mismatch. The timing issue will also be revisited in a future TAC paper.
  • Paragraphs B62 and B63 of IFRS S2 require commercial banks and insurers to use the ‘Global Industry Classification Standard (GICS),' when disaggregating gross financed emissions. However there are several alternative industry classification standards being used by UK entities e.g. ICB; and requiring one particular commercial standard over others may increase the costs to entities and also result in non decision useful data.
  • The TAC would support more flexibility in the use of classification standards rather than mandating only one. As entities are still in the early stages of reporting in this area, proposing more flexibility in the approach used shouldn't hamper comparability. However the TAC should propose that any alternative approach used should align to an existing reporting or regulatory framework (eg: Basel Pillar 3) - so permitting flexibility should not create a new approach. Ideally entities should work towards a single non-commercial classification system. This is also an area that could be raised in discussions with the ISSB.

The tentative endorsement recommendations in the paper are:

  • to maintain the requirements in IFRS S2 in relation to financed emissions.
  • that the ISSB consider the expected level of coverage of emissions included in financed emissions disclosures be considered as part of industry-based standards as they are developed.
  • that the advice to the Secretary of State notes that:
    • consistent with IFRS S1 paragraph B29, entities shall not reduce the understandability of the disclosures by aggregating information that are dissimilar, which suggests that entities should disaggregate their assets under management financed emissions disclosures by assets that are owned and controlled by the entity and by assets are not owned or controlled by the entity
    • UK stakeholders have suggested that the development of frameworks for the calculation of financed emissions for different financial products should be an area for continued monitoring as practice is established.
    • the use of the GICS should be an area for continued monitoring to provide feedback to the ISSB when they conduct the post-implementation review of IFRS S2.
    • in accordance with IFRS S2 paragraph 29(a)(iii) entities should disclose appropriate explanation and context as to why disaggregated financed emissions figures are disclosed.
    • the September 2024 TIG discussion on financed emissions related to undrawn facilities should be followed and that the application of the requirement should be monitored.

The TAC agreed to defer a decision on whether to maintain the requirements in IFRS S2 in relation to financed emissions until the future TAC discussion on timing which will consider alignment with IFRS S1 paragraph 64.

The TAC agreed to amend IFRS S2 so that entities are not required to use GICS when disaggregating gross financed emissions but may use GICS or a different existing regulatory or reporting framework.

The TAC agreed to recommend to the ISSB that the expected level of coverage of emissions included in financed emissions disclosures be considered as part of industry-based standards as they are developed.

The TAC also agreed to note the following matters in its advice to DBT:

  • that consistent with IFRS S1 paragraph B29 and B30 entities should disaggregate their assets under management financed emissions disclosures consistent with the accounting treatment of those assets, e.g., distinguishing between assets that are owned and controlled by the entity and by assets are not owned or controlled by the entity.
  • that UK stakeholders have suggested that the development of global frameworks and standards for the calculation of financed emissions for different financial products should be an area for continued monitoring as practice is established.
  • that in accordance with IFRS S2 paragraph 29(a)(iii) entities should disclose appropriate explanation and context as to why disaggregated financed emissions figures are disclosed.

The TAC also agreed to follow the September 2024 TIG discussion on financed emissions related to undrawn facilities to determine whether or not a reference to this technical area be made in its advice to DBT. Following the TIG discussion, a paper may be brought back to the TAC on this topic.

5 Cross-industry metrics (not GHG)

The TAC considered Agenda Paper 5 on cross-industry metrics, excluding GHG emissions.

This paper considered the requirements in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2) relating to metrics, including the specified cross-industry metric categories in IFRS S2. The TAC was asked to consider whether the requirements are sufficiently clear and whether there are technical challenges that may prevent entities from providing understandable, relevant, reliable and comparable disclosures. The TAC was asked to consider the following questions.

  • Does the TAC agree with the analysis in this paper in relation to the cross-industry metric requirements in IFRS S1 and IFRS S2?
  • Does the TAC agree to tentatively recommend to request further clarification from the ISSB as to what the objective of Metrics and Targets means in terms of whether certain information is required to be disclosed regardless of an entity's materiality assessment?
  • Does the TAC agree to tentatively recommend to maintain the requirements for the disclosure of information relating to the cross-industry metric categories in IFRS S2 paragraphs 29(b)–(g) but request that the ISSB clarify the terminology used, including the terms 'vulnerable' and 'aligned with'?
  • Does the TAC agree to tentatively recommend to request further clarity from the ISSB as to why IFRS S2 paragraph 29(e) is not subject to the permission to use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort, and what is meant by 'deployed'?
  • Does the TAC agree to tentatively recommend to engage with the ISSB in updating the Industry-based Guidance on Implementing IFRS S2 to include metrics that support entities in reporting against the cross-industry metric categories in IFRS S2 paragraphs 29(b)–(e)?

The TAC discussions covered the following points.

  • The potential inconsistency between financial statements and the cross-industry metrics, especially when sustainable-related reporting may use a range of estimates, whereas financial reporting requires the disclosure of a single point estimate. It was noted that IFRS S1 already requires entities to disclose where there are differences between sustainability-related information and information in the financial statements.
  • The confusion related to the objective of the Metrics and Targets section is resolved by IFRS S1 paragraph B25 that states that ‘an entity need not disclose information otherwise required by an IFRS Sustainability Disclosure Standard if the information is not material. This is the case even if the IFRS Sustainability Disclosure Standard contains a list of specific requirements or describes them as minimum requirements.'
  • Some members agreed that further clarity on the terminology 'align with', 'vulnerable', and 'deployed' may be needed as they are too vague and open to various interpretations which may lead to variation in practice. Other members noted the previous TIG decision that the definitions of these words are deliberately non-specific so that management form their own view of what it means within their own framework so that we see practice develop over time.
  • It was noted that entities should already be assessing climate-related risks and opportunities as part of the TCFD disclosures and should therefore define parameters for assessing those risks and opportunities including defining terms like 'vulnerable' and 'aligned with'.
  • The term 'vulnerability' is not just dependent on the sector or industry an entity operated in, but also its value chain and geographical footprint. The members broadly agreed that a definition would be too rigid.
  • Members broadly agreed that this might be an area of practice that needs to be monitored, and if there are differences in application this could be something to feedback to the ISSB during it post-implementation review.

The tentative endorsement recommendation in the paper is:

  • to request further clarification from the ISSB as to what the objective of Metrics and Targets means in terms of whether certain information is required to be disclosed regardless of an entity's materiality assessment.
  • to maintain the requirements for the disclosure of information relating to the cross-industry metric categories in IFRS S2 paragraphs 29(b)–(g) but request that the ISSB provide further clarification as to the terminology used, including the terms ‘vulnerable' and 'aligned with'. The TAC should also observe market practice as it develops and may consider providing feedback to the ISSB during its post-implementation review of IFRS S2.
  • to request further clarity from the ISSB as to why IFRS S2 paragraph 29(e) is not subject to the permission to use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort, and what is meant by ‘deployed'.
  • to engage with the ISSB in updating the Industry-based Guidance on Implementing IFRS S2 to include metrics that support entities in reporting against the cross-industry metric categories in IFRS S2 paragraphs 29(b)–(e).

The TAC did not agree to request further clarification from the ISSB as to what the objective of Metrics and Targets means in terms of whether certain information is required to be disclosed regardless of an entity's materiality assessment. The TAC noted that IFRS S1 paragraph B25 resolves this issue by clarifying an entity need not disclose information otherwise required by an IFRS Sustainability Disclosure Standard if the information is not material.

The TAC agreed to maintain the requirements for the disclosure of information relating to the cross-industry metric categories in IFRS S2 paragraphs 29(b)-(g), and to observe market practice as it develops and provide feedback to the ISSB during its post-implementation review of IFRS S2. The TAC acknowledged the illustrative guidance that accompanies IFRS S2, but noted that no endorsement process has been undertaken on these examples. The TAC did not agree to request that the ISSB provide further clarification or guidance as to the terminology used, including the terms ‘vulnerable' and 'aligned with', but to let market practice evolve and for this to be monitored.

The TAC agreed to request further clarity from the ISSB as to why IFRS S2 paragraph 29(e) is not subject to the permission to use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort. The TAC did not agree to request that the ISSB provide further clarification as to what is meant by 'deployed', but to let market practice evolve and for this to be monitored.

The TAC agreed to engage with the ISSB in updating the Industry-based Guidance on Implementing IFRS S2 to include metrics that support entities in reporting against the cross-industry metric categories in IFRS S2 paragraphs 29(b)−(e).

6 Any other business

There was no AOB. The meeting ended at 16:30.

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