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TAC Public Meeting January 2026 Paper 4: Letter to ISSB on GHGP
AGENDA PAPER 4
Executive summary
| Date | 19 January 2026 |
| Paper reference | 2026-TAC-002 |
| Project | GHG Protocol Revisions |
| Topic | Draft letter to ISSB on GHG Protocol revisions |
Objective of the paper
This paper presents a draft letter to the ISSB which outlines areas in the GHG Protocol consultation that the ISSB should be aware of and engaged with.
Decisions for the TAC
The TAC is asked to approve the draft letter to be published alongside the TAC's response to the GHG Protocol.
Appendices
Appendix 1 - TAC's letter to the ISSB regarding the proposed revisions to the GHG Protocol materials
This paper has been prepared by the Secretariat for the UK Sustainability Disclosure Technical Advisory Committee (TAC) to discuss in a public meeting. This paper does not represent the views of the TAC or any individual TAC member.
Context
1In addition to the TAC's response to the consultation issued by the Greenhouse Gas (GHG) Protocol, the TAC also agreed to write a letter to the International Sustainability Standards Board (ISSB). This letter would ask the ISSB to outline its proposed approach to updating the GHG Protocol references in IFRS S2 Climate-related Disclosures (IFRS S2), and highlight areas of the GHG Protocol consultation areas where the ISSB may work with the GHG Protocol to improve the proposed revisions. The TAC noted that the ISSB should work with the GHG Protocol to ensure the proposed revisions to the GHG Protocol materials and the ISSB Standards are aligned, or at least are not contradictory.
2In its December meeting, the TAC agreed to amend a draft version of the letter to include points raised in the meeting concerning materiality, and a request for clarification about the ISSB's process for evaluating GHG Protocol outputs once finalised for incorporation into IFRS S2. The updated proposed letter to the ISSB is presented in Appendix 1 for the TAC's consideration.
Next steps
3If the TAC approves the draft letter in Appendix 1, the TAC Secretariat will finalise the text, including any suggested amendments, for the Chair to review and approve. The letter will be sent to the ISSB and published on the FRC website.
Questions for the TAC
- Does the TAC approve the draft letter to the ISSB?
Appendix 1 – TAC's letter to the ISSB regarding the proposed revisions to the GHG Protocol materials
[Letter head]
Mr Emmanuel Faber The Chair International Sustainability Standards Board Opernplatz 14 60313 Frankfurt am Main Germany
XX January 2026
UK Sustainability Disclosure Technical Advisory Committee's views on the GHG Protocol's proposed revisions to the Scope 2 guidance
Dear Emmanuel,
4The UK Sustainability Disclosure Technical Advisory Committee (TAC) has provided comments to the GHG Protocol on its proposed revisions to its Scope 2 guidance. Given the reference to the GHG Protocol's materials in IFRS S2 Climate-related Disclosures the TAC is pleased that the ISSB has a role as observer on the Independent Standards Board (ISB). It is paramount that the ISSB engage with the revision process to ensure that any changes to the GHG Protocol align with, or at least do not contradict, the principles and requirements in IFRS S1 and IFRS S2.
5This letter sets out observations made by the TAC that are relevant to the ISSB.
ISSB process to revise the reference to GHG Protocol
6The TAC is engaging with the GHG Protocol's consultation process in anticipation of the ISSB making an amendment to IFRS S2 to update the reference to the GHG Protocol materials. It will be helpful if the ISSB outlines the process it intends to take to update this reference, including whether there will be a full assessment of the GHG Protocol Standards and guidance once finalised, and whether this assessment will be publicly available through discussions in ISSB meetings.
7We recognise that the objective of the GHG Protocol goes beyond the objective of ISSB standards, and therefore some of the proposed revisions to the GHG Protocol materials may not be suitable for inclusion, or reference, in the ISSB standards. Considering the IFRS Foundation's definition of materiality, the ISSB is encouraged to consider whether all the proposed amendments to the GHG Protocol materials will result in decision useful information for primary users, particularly considering the potential and significant additional cost for reporting entities.
Approach to market-based Scope 2 emissions
8The TAC notes that IFRS S2 paragraph 29(a)(v) does not require the disclosure of the market-based approach. From our engagement with stakeholders, we have understood that many companies would welcome this requirement being expanded to include market-based methods in addition to location-based methods.
9It would be useful to primary users to have more detailed disclosure on the nature of the contractual instrument that is being used, including the length of any contractual agreement. For example, disclosure of the length of any contractual agreement would provide users with information about the risk of market price fluctuations. Additionally, if the proposed revisions to the Scope 2 guidance are finalised as currently written, companies will be able to take various approaches and can use the feasibility measures when appropriate. It is important that primary users understand the approach that is taken and whether the company has used any of the feasibility measures. IFRS S2 already requires the disclosure of the approach used to calculate GHG emissions, but the ISSB may in the future consider whether more detailed disclosure requirements are necessary.
Feasibility measures and hierarchies
10The ISSB and GHG Protocol should ensure that the proposed feasibility measures and hierarchies are not inconsistent with IFRS S2. For example, although the Scope 3 measurement framework in IFRS S2 is not presented as a hierarchy, it does require companies to prioritise certain characteristics of the underlying data in a similar approach to a hierarchy. In the proposed revisions to the Scope 2 guidance, there are several hierarchies that are used for the same purpose. The ISSB and GHG Protocol should consider whether the multiple approaches that are required to be used by companies when applying both the GHG Protocol and IFRS S2 are consistent and simplified.
Definition of 'free to use' versus 'without undue cost'
11The proposed definition for 'accessible' in the GHG Protocol's proposed revisions only requires the use of publicly available, free to use emission factors from credible sources. This is notably different from the ISSB's requirements to use 'reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort'. The ISSB and GHG Protocol should consider whether the difference in wording will lead to variations in practice. When considering the process to revise the GHG Protocol reference in IFRS S2, the ISSB should reflect on the concepts used by the GHG Protocol and ensure that they are mapped to the principles and requirements in IFRS S1 and IFRS S2. This is especially important when similar concepts are used but with different terminology.
Impact on accounting for nature-dependent electricity contracts
12Additionally, we would like to highlight the possible impacts of the proposed revisions to the Scope 2 Quality Criteria 4 and 5 to financial accounting, including IFRS 9 Financial Instruments own-use eligibility, hedge accounting and IAS 37 Provisions, Contingent Liabilities, and Contingent Assets onerous contracts.
13Although an appropriate legacy clause may resolve some potential issues, we have recommended that the GHG Protocol engages with both ISSB and IASB technical staff to avoid any overlaps or conflicts. We have also recommended that the GHG Protocol technical team discusses the recent IASB work on nature-dependent electricity contracts to fully assess any potential consequences of the revisions in this consultation. We recognise that the changes to the GHG Protocol may lead to further necessary changes to the IFRS accounting standards, but we urge the GHG Protocol and the IASB to engage with each other to understand the impact of each other's work on the respective standards.
If you have any queries or would like to discuss our comments in more detail, please do not hesitate to contact me or the TAC Secretariat at [email protected].
Yours sincerely
[Insert signature]
Sally Duckworth Chair of the UK Sustainability Disclosure TAC Email: [email protected]