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TAC Response to ISSB on the GHG Protocol’s proposed revisions to the Scope 2 guidance
OFFICIAL - PUBLIC
Mr Emmanuel Faber The Chair International Sustainability Standards Board Opernplatz 14 60313 Frankfurt am Main Germany
28 January 2026
UK Sustainability Disclosure Technical Advisory Committee's views on the GHG Protocol's proposed revisions to the Scope 2 guidance
Dear Emmanuel,
The 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 requirements in IFRS S1 and IFRS S2.
This letter sets out observations made by the TAC that are relevant to the ISSB.
ISSB process to revise the reference to GHG Protocol
The 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 would be helpful if the ISSB outlined 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. It is critical for stakeholders to understand how the ISSB will proceed so that stakeholders understand how to engage with the GHG Protocol's revision process.
We 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. In particular, given the IFRS Foundation's definition of materiality, the ISSB is encouraged to consider whether all the proposed amendments to the GHG Protocol materials are suitable for the ISSB's purposes.
In our response to the GHG Protocol we highlight that any changes to the GHG Protocol materials should be capable of being assured. When revising the reference to the GHG Protocol in IFRS S2, we suggest that the ISSB also consider whether the revisions lead to information that is capable of being verified in accordance with IFRS S1.
Approach to market-based Scope 2 emissions
The 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.
It would be useful to primary users of general purpose financial reports (investors) 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 primary users with information about the risk to 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
The 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'
The proposed definition for 'accessible' 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’. Although in essence these two requirements are trying to achieve the same thing, the difference in wording might result in different approaches being taken by companies when collecting and calculating their GHG emissions data. Additionally, the costs associated with data often do not take into consideration the time and resources used to obtain and process the data. The ISSB and GHG Protocol should consider whether the difference in wording will lead to variations in practice.
Impact on accounting for nature-dependent electricity contracts
Additionally, 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. For example, the mismatched requirements relating to hourly matching versus annual matching could present a problem for companies.
Although an appropriate legacy clause may resolve some potential issues, we have recommended that the GHG Protocol engages with both the ISSB and IASB technical staff to understand and avoid unintended consequences. These could include for example, connectivity matters for the ISSB and IASB, such as interaction with the IASB's recent work on nature-dependent electricity contracts, to fully assess any potential consequences of the proposed Scope 2 revisions and their effect on IFRS accounting standards and sustainability disclosure 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
Sally Duckworth Chair of the UK Sustainability Disclosure TAC Email: [email protected]
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