Disclosure focus
This disclosure asks an organisation to explain its greenhouse-gas targets in a way that lets readers understand what the target actually covers and how it is meant to be achieved. In practice, that means setting out the target’s scope, the gases and activities it applies to, the time horizon, and any assumptions or methods used to measure progress. It also means being clear about whether the target relates to the whole business or only to selected parts of it, so users can see the difference between group-wide coverage and narrower operational coverage.
It also asks for transparency on the role of carbon credits in meeting the target. The practical focus is on whether credits are being used, how they are being used, and how much of the target depends on them. This helps readers judge whether progress is being driven mainly by direct emissions reductions within the organisation’s own operations and value chain, or partly by external offsets or removals.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official IFRS source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show s2-36 sub-elements (LRA working checklist)
If a net target is used, also state the matching gross target alongside it.
Set out how much the target depends on carbon credits.
Describe the credit type used and the assumptions made about its quality and integrity.
Specify which greenhouse gases are included.
Make clear whether the figure is presented on a gross basis or a net basis.
Identify which emissions scopes are included.
Explain whether a sector-based method has been applied.
Name the verifier or certifier involved.
How to prepare it
1Set the boundary for the disclosure first: decide which greenhouse gases are in scope, which emissions scopes you are covering, and whether your reporting is built on a gross basis or a net basis.
2Check whether the target is framed by sector-specific methods, and if so, record that approach clearly so the reader can see how the target was set.
3If a net target is used, identify the matching gross target alongside it and keep the link between the two explicit in your working papers.
4Gather the support for any use of carbon credits: note how much the target depends on them, what kind of credits are being relied on, and the assumptions you have made about their quality or credibility.
5Collect the evidence for who checked or certified the information, then assemble the final narrative or figures so the disclosure is complete and internally consistent.
6Document any exclusions, methodology changes, or judgement calls, then compare the draft back to the official source to confirm nothing required has been missed or misstated.
Request the data
Request the target and credit evidence pack
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What target wording, coverage and credit assumptions should we use for the organisation’s climate target disclosure, and what supporting evidence shows how those choices were set and checked?
Use your organisation’s own terms first, then map them to the disclosure fields. For example, if your team talks about a decarbonisation plan, emissions pathway, offsetting, removals, or assurance review, use those internal labels in the request and only translate them afterwards for reporting. This is a training template; adapt it to your organisation and check the source material before sign-off.
Weak request
Please provide the IFRS S2 target disclosure data for greenhouse-gas targets and carbon credits.
Why it fails: It uses framework language instead of the team’s own working terms, so the owner has to guess which internal documents and decisions are needed. It also does not separate the practical items: target basis, linked gross target, gases, scope coverage, credit use, credit type, quality checks, sector method, and reviewer details.
Better request
Please send the climate target pack for [reporting period] from your team’s working files: the target wording, whether it is gross, net, or both, the gases and emissions coverage, any gross target linked to a net target, any use of carbon credits, the credit type and quality checks, the sector pathway used, and who reviewed or verified it. Include the source files or links.
Industry examples
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Set out the basis used for the target, including whether it is shown on a gross or adjusted basis, which emissions sources and gases are included, whether a sector-specific method was applied, and what assumptions were made about any credits and their quality, together with any external review or certification.
Context note
Explain what the figures mean in practice by linking the target design to the emissions sources and gases covered, the degree of reliance on credits, and whether the reported figure is a gross or adjusted view of the target.
Fluctuation statement
If the target picture has changed, explain whether the movement comes from a shift between gross and adjusted presentation, a change in credit reliance or credit assumptions, a different emissions coverage, or a revised sector-based method.
Content index entry
s2-36 Greenhouse-gas-target specifics and carbon credits — [location / page] / [notes]
Download Centre
Preparation tools & forms
Professional preparation tools for s2-36 — free with an LRA Community membership. Register once (it's free) and every download unlocks, together with the Disclosure Library, templates and the LRA AI-assistant.
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner, wrong desk
The request goes to the sustainability team alone, instead of the people who hold the target file, carbon credit records, or assurance papers in the organisation’s own terms.
No clear boundary set
Teams pull figures from different parts of the business without first agreeing which operations, gases, and emissions scopes belong in the pack.
Gross and net figures mixed
Someone combines the underlying target with the version adjusted for credit use, so the source set no longer shows which basis each figure came from.
Wrong reporting period
The data is lifted from a different year, cut-off date, or planning cycle than the one used for the disclosure pack.
Source labels get stripped out
During consolidation, the original file names, version tags, and table labels are lost, making it impossible to trace each number back to its source.
Separate populations merged
Target data, credit-use data, and verification details are rolled into one spreadsheet even though they need to stay separate for collection and review.
Credit details left too vague
The team records only that credits were used, but misses the type of credit and the assumptions used to judge its quality or integrity.
No evidence trail
The pack is assembled without saving the supporting documents, metadata, and sign-off history needed to show who checked what and when.
Where judgement is often needed
Setting the target boundary after a buy-in or sale
Use the business perimeter that matches the target period, then explain any step-up or step-down from acquisitions, disposals or other portfolio moves so readers can see what changed and why.
Choosing which emissions pool sits inside the target
If your target covers only part of the organisation, state the exact operational areas, sites or activities included and explain how you treated anything close to the edge of that boundary.
Handling different gas lists across locations
Where country rules, contracts or local reporting practice lead to different gas sets, spell out the gases you counted, the basis for any exclusions, and how you kept the approach consistent across the group.
Deciding whether the target is shown before or after offsets
Make clear whether the target is presented on a before-offsets or after-offsets basis, and if both are used, separate the two figures and explain the link between them.
Explaining the role of carbon credits in the target story
State how much the target depends on credits, identify the credit type, and describe the quality checks or assumptions you used when judging whether those credits are acceptable for the target narrative.
Mixing measured data with estimates
If some parts of the target are built from direct readings and others from estimates, say which parts are measured, which are modelled, and what judgement you used where the data were incomplete.
Rounding and small residuals
Set out your rounding rule and explain any small differences that appear because figures were rounded, so the target, the gross figure and any net figure still reconcile sensibly.
Protecting sensitive location or customer data
When the target touches small sites, customer groups or other sensitive populations, aggregate the information enough to protect privacy while still showing the scope, method and any exclusions clearly.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Power generation
We report our climate target on a net basis for our own operations and electricity use, and we also show the matching gross reduction path before any credit use. - Our net goal is a 50% cut by 2030 against a 2020 base year; the linked gross pathway is a 42% cut, so the gap is covered by 8 percentage points of carbon credits. - The target covers carbon dioxide, methane and nitrous oxide across Scope 1 and Scope 2, and we explain that the pathway follows a sector-based decarbonisation method rather than a company-specific model. - Any credits are limited to verified removals from long-lived storage projects; we assume they are additional, permanent and not double-counted, and an external assurance provider reviews both the target design and the credit claims.
This synthetic disclosure shows how to explain a net target alongside the underlying gross pathway, the emissions sources and gases included, the sector method used, and the credit assumptions and independent review.
Illustrative (synthetic) example — Food manufacturing
We present our climate ambition on a gross basis, but we also disclose the net figure where a small share is met with credits so readers can see the full picture. - Our gross plan is a 35% cut by 2035 from a 2022 base year; the net figure is 40%, with the extra 5 percentage points coming from credits. - The coverage includes Scope 1, Scope 2 and selected Scope 3 categories, and the gases in scope are carbon dioxide, methane, nitrous oxide and fluorinated gases. - We use a sector pathway aligned to food processing, and the credits are from high-durability removals with assumptions that they are independently verified, legally retired and not used by anyone else; a third-party certifier checks the credit quality and our reporting.
This synthetic disclosure shows how to explain a gross target with a net overlay, the emissions scopes and gases included, the sector pathway used, and the credit reliance, quality assumptions and external certification.
How companies report s2-36
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
SITC International Holdings Company Limited
Water Transportation · Hong Kong · 2025
SITC International Holdings Company Limited’s 2025 Environmental, Social and Governance Report includes a disclosure on carbon credit reliance, noting the use of carbon sinks, carbon credits, carbon offset trading, or carbon capture to achieve a zero carbon target of 100% reduction (p.77). The report provides related context on greenhouse gas emissions targets, scopes, and gases covered, but these disclosures are unclear or incomplete, with no explicit details on the types of gases covered (p.180), scopes of emissions included (p.182), or assumptions about credit type and integrity (p.195). Notably, the report lacks any clear information on whether targets are set on a gross or net basis, associated gross targets if net targets exist, sectoral approaches, or verification and certification of emissions data.
MTR Corporation
Ground Transportation — Railroads · Hong Kong · 2025
MTR Corporation’s Sustainability Report 2025 provides detailed data on greenhouse gas emissions by scope, including specific tCO2e values for Scope 1, Scope 2, and Scope 3 categories on page 66. The report references carbon initiatives aligned with reduction commitments and mentions a Carbon Data Reporting Platform for enhanced insights (p.67), but does not clearly disclose reliance on carbon credits. Notably, the report lacks explicit information on associated gross targets if net targets exist, credit type and integrity assumptions, gases covered, gross versus net basis, sectoral approach, and verification or certification details.
Enel Chile S.A.
Electric Utilities / IPP / Energy Traders · Chile · 2025
Enel Chile S.A.’s 2025 Integrated Annual Report shows that its greenhouse gas emissions reporting covers 100% of emissions regulated under reporting requirements (p.352) and includes Scope 1 emissions reductions related to thermal power plant operations (p.115). The company applies a Sectoral Decarbonization Approach aligned with the 1.5°C Science Based Targets initiative (p.189). However, the report does not provide information on whether emissions targets are set on a gross or net basis, the use or reliance on carbon credits, or details on verifier or certifier involvement.
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Scenarios to work through
A group has a long-term emissions aim set on a net basis, but the draft report only says the business will reach net zero by 2040. The working papers also show a separate gross reduction pathway, plus planned use of carbon credits in the final years.
QWhat should the preparer check is included so the target description is complete enough for this disclosure?
Reveal model answer →Hide answer ↑The target write-up should make clear whether the aim is stated on a gross or net basis, and if it is net-based it should also set out the linked gross target. It should also explain how much the plan depends on carbon credits, and describe the type of credits and the assumptions used to judge their quality or integrity. If the target covers only some gases, those gases need to be identified, along with the scopes and any sector-specific method used. The report should also name the verifier or certifier where one has been used.
Why this matters · A target description needs the basis, coverage, credit reliance, and assurance details to be understandable on its own.
A manufacturer has a 2035 climate target covering only carbon dioxide and methane from scopes 1 and 2. The sustainability team wants to describe the target as a single company-wide emissions goal without mentioning the gases excluded or the fact that the pathway is sector-based.
QHow should the preparer decide what to disclose about the gases, scopes, and method behind the target?
Reveal model answer →Hide answer ↑The disclosure should spell out which gases sit inside the target, rather than leaving readers to assume all greenhouse gases are included. It should also state which scopes the target covers, and if the target follows a sector-specific route, that approach should be described in plain language. If the target is presented on a net basis, the linked gross target should be shown as well, so the reader can see the underlying reduction plan rather than only the offset-adjusted end point.
Why this matters · Be explicit about what is covered and how the target was built, especially where the target is partial or sector-led.
A company plans to meet part of its 2030 target by buying credits from a mix of forestry and industrial gas projects. The draft note says only that credits will be used, but it does not explain how much of the target depends on them or what quality checks were applied.
QWhat should the preparer do before finalising the target narrative?
Reveal model answer →Hide answer ↑The preparer should explain the extent to which the target depends on credits, not just mention that credits will be used. The note should also identify the kind of credits being relied on and the assumptions used to judge their integrity, so readers can see what underpins the claim. If the target is net-based, the associated gross reduction target should also be disclosed alongside the credit information.
Why this matters · Where credits support a target, readers need both the level of reliance and the basis for judging credit quality.
A business has had its climate target reviewed by an external certifier, and the team wants to mention the review in a footnote only. The main target table already shows the end date and headline reduction percentage, but not the reviewer or the gross-versus-net basis.
QWhat should the preparer check is visible in the target disclosure itself?
Reveal model answer →Hide answer ↑The target disclosure should make the basis of the target clear in the main narrative, including whether it is gross or net. If the target is net-based, the related gross target should be shown too. The identity of the verifier or certifier should also be stated where that review exists, rather than being left buried in a note that readers may miss.
Why this matters · Key target qualifiers should be easy to find in the disclosure, not hidden away from the main explanation.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
Primary
Related & explore
FAQ
Questions this page answers
For IFRS S2 disclosure s2-36, what data do I need to gather before I start drafting the page?+−
The page says to prepare a defined set of datapoints, including linked gross target, credit use reliance, credit quality basis, covered gases, reporting basis, included scopes, sector method and assurance provider. Use the step-by-step preparation section to turn those into a draft and check the evidence pack before you write.
How do I use the s2-36 step-by-step preparation section in practice?+−
Use it as a working sequence for collecting the required inputs, checking the scope and method, and then shaping the disclosure draft. The page is designed to help you move from raw data to a report-ready narrative and table.
What should I ask my data owners for when preparing s2-36?+−
Ask for the specific datapoints listed on the page, plus the supporting evidence behind each one. The page also points you to an evidence pack, so you can request documents that show how the figures and basis were prepared.
How do I decide the reporting basis and included scopes for s2-36?+−
The page flags both reporting basis and included scopes as datapoints to prepare, so you should define them before drafting and keep the basis consistent across the disclosure. The workbook and preparation section are there to help you capture that method clearly.
What does the page mean by sector method for s2-36, and how should I document it?+−
The page treats sector method as one of the datapoints to prepare, so it should be captured as part of your methodology rather than left implicit. Document it in the workbook and keep the supporting evidence in the assurance pack.
Who should own the s2-36 disclosure and the underlying evidence pack?+−
The page does not assign a named role, but it is written for sustainability/ESG managers, HR or data owners, and assurance reviewers to work together. In practice, one person should coordinate the draft while data owners and assurance reviewers provide the inputs and checks.
What evidence should I keep ready for assurance on s2-36?+−
The page says there is an evidence pack with five items and also lists six assurance claims to verify, each with a claim, risk and evidence angle. Use those materials to build a file that shows how each datapoint was derived and checked.
What are the common mistakes or reporting gaps to avoid in s2-36?+−
The page includes a list of common reporting gaps and mistakes, so it is meant to help you spot weak or missing disclosure before sign-off. A practical use is to compare your draft against that list and fix any gaps in scope, method, evidence or narrative.
How do I use the s2-36 workbook download and printable library card?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format and a printable Library Card in .pdf format. Use the workbook to collect and organise the inputs, and the PDF as a quick reference while drafting or reviewing the disclosure.
Can I use the synthetic example disclosure on s2-36 as a template for my own draft?+−
Yes, but only as a worked illustration. The page says the examples are synthetic, so use them to understand structure, wording and how the quantitative table is presented, then replace them with your own internally consistent data.
Is there any cross-framework material I can reuse for s2-36 if I also report under ESRS E1?+−
The page notes ESRS E1 (Climate Change) as the closest correspondence, so the same underlying data may be reusable across reporting work. It does not say the requirements are identical, so you should still check each framework separately before reusing anything.
More questions this page can help with
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