Disclosure focus
In practical terms, the key question is how broadly the carbon price is used across the business. Reporting should make clear whether it applies only to selected projects, business units or flagship sites, or whether it is embedded across operations and capital allocation more widely. The aim is to show the extent of coverage and how consistently the price is used in real decisions.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official IFRS source.
Prepare
What to collect before drafting
Tick each field as the evidence lands. Owners are the teams that usually hold the source files.
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Carbon price uses
Finance / sustainabilityDescribe where the organisation applies an internal carbon price in practice, and for which activities, plans or assessments it is used.
Evidence Policy note, planning template, investment appraisal pack, or internal guidance showing where the price is applied.
Watch for The use case is recorded in one team’s template but not the source planning or investment system it is meant to support.
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Scope and assumptions
Finance / sustainabilitySet out the parts of the business, activities and time horizon covered by the carbon price, plus the key assumptions used to build it.
Evidence Method note, model assumptions sheet, or pricing memo with the covered scope and underlying inputs.
Watch for The coverage is described at group level but the model only applies to a subset of entities or scenarios, so scope and period are mixed.
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Affected decisions
Finance / strategyList the decisions, approvals or planning choices that the carbon price has influenced during the reporting period.
Evidence Investment papers, budget submissions, strategy decks, or approval records showing the price was used in decision-making.
Watch for The reported decisions are taken from a narrative list but do not reconcile to the actual approval or capital-planning records.
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Price level
FinanceState the carbon price amount or amounts used, including any different levels applied for different purposes or scenarios.
Evidence Pricing schedule, model output, or approved rate card showing each price level in use.
Watch for A single headline rate is reported even though the model uses multiple rates, so the category definition does not match the underlying pricing set.
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Internal charge method
Finance / taxExplain whether the organisation uses a notional carbon price or an internal charge, levy or tax, and how the two are distinguished in practice.
Evidence Tax policy, internal charging policy, or finance guidance showing the treatment and terminology used.
Watch for The internal fee is described as a shadow price, but the finance ledger treats it as an actual charge, so the source system and definition are not aligned.
Before you start
- Have we decided which business uses of our carbon price we will include, and which ones stay out of scope?
- For the figures we plan to show, have we fixed the price level or levels and the period they relate to?
- Can we trace each number back to a source record or model, with the working assumptions clearly captured?
- Have we agreed what counts as the covered activities, entities, or projects for this disclosure, and on what basis?
- Are we clear whether the price is a planning signal, a notional charge, or an internal levy, so we describe it consistently?
How to prepare it
Request the data
Request the internal carbon price details
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
How do we use an internal carbon price in planning and decision-making, and what evidence shows the price levels, scope, assumptions, and the choices it has influenced?
Use your organisation’s own terms first, then map them to the disclosure. For example, if your team talks about a carbon charge, planning price, or emissions cost assumption, use that language in the request and only translate it afterwards for reporting. This is a possible LRA training template; adapt it to your organisation and check the official source before sign-off.
Weak request
Please provide the internal carbon pricing disclosure and all mandatory evidence for the standard.
Why it fails: It uses framework language instead of the organisation’s own terms, does not tell the owner what practical information is needed, and does not separate the price level, scope, assumptions, and decision use into clear items that can be evidenced.
Better request
Please send the carbon cost assumption or internal charge used in [business area] for [reporting period], including the level(s), where it is applied, how it was set, and the decisions it has influenced. Use your team’s own wording and attach the workbook, policy note, or approval paper that shows how it is used.
Formal email template
Subject: Request for internal carbon price evidence for [reporting period]\n\nHi [name/team],\n\nWe are pulling together the evidence pack for our sustainability reporting and need your help with the internal carbon price information used in [business area / process].\n\nPlease send, for [reporting period]:\n- the price level(s) used\n- where the price is applied\n- the basis and key assumptions behind the level(s)\n- the decisions or processes it has influenced\n- whether the price is used as a planning assumption, a charge, a fee, a tax-like amount, or another internal term\n- any supporting files or links that show how this is used in practice\n\nPlease use your team’s own wording first, then we can map it into the reporting pack. If helpful, a short table is fine.\n\nThis is a possible LRA training template; please adapt it to your organisation and check the official source before sign-off.\n\nThanks,\n[preparer name]
Short Teams / Slack version
Hi [name/team] — could you share the internal carbon price details for [reporting period] in [business area]? We need the price level(s), where it is used, the basis/assumptions, and what decisions it has affected. Please send your team’s own wording plus any supporting file/link. Thanks.
Industry examples
Manufacturing
Context. A group uses a carbon cost in capex screening and plant upgrade cases.
Adapted request. Hi [name/team], please share the carbon cost assumption used in capex appraisals for [reporting period]. We need the level(s), which projects it applies to, the basis for setting it, and any examples of investment decisions it changed. Please include the model or approval note.
Example response. The planning team uses a carbon cost of £75 per tCO2e for all major capex cases above £1m. It is applied in the investment model and was used in three plant upgrade approvals. The level was set by Finance and Sustainability based on the medium-term transition plan.
Financial services
Context. A bank uses an emissions cost assumption in lending and portfolio planning.
Adapted request. Hi [name/team], could you send the emissions cost assumption used in portfolio planning for [reporting period]? Please include the level(s), the products or portfolios it covers, the basis for the assumption, and the decisions it has influenced. A policy note or committee paper would be helpful.
Example response. The risk team applies a carbon cost of £120 per tCO2e in transition scenario work for corporate lending portfolios. It covers sectors flagged as higher exposure in the climate model. The assumption informed sector limits and client engagement priorities, as set out in the committee paper.
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
Explain what you mean by each carbon-price measure, how you set the coverage boundary, and the assumptions used to apply the price in practice.
Context note
Set out how the carbon-price approach is used in the business and what the reported figures indicate about decision-making, planning, or cost signals.
Fluctuation statement
If the price level, coverage, or the decisions affected changed during the period, describe what changed and the business reason for the shift.
Content index entry
s2-29-f Internal carbon prices — [location / page] / [notes]Download Centre
Preparation tools & forms
Download preparation tools for s2-29-f with free verified email access for 24 hours. Source-report links remain public.
Check
For each claim, check the evidence
We have explained where the figure is used in our planning and appraisal process, and which business choices it feeds into.
Risk An assurer may ask whether the stated use is real, current, and supported by documented decision processes rather than a generic policy statement.
Evidence to check Internal policy or methodology note; examples of investment, budgeting, pricing, or project papers showing the figure being used; approval papers or meeting packs that reference the figure.
We have set out the parts of the business the figure covers, together with the main assumptions we used to apply it.
Risk An assurer may probe whether the coverage is complete for the stated boundary and whether the assumptions are consistent, reasonable, and applied in the same way across the reporting period.
Evidence to check Boundary memo; calculation workbook; assumption log; source data extracts; reconciliation between covered activities and the reported figure; version history showing assumption changes.
We have identified the decisions that were actually shaped by the figure, rather than only describing intended future use.
Risk An assurer may challenge whether the examples are specific, evidenced, and attributable to the figure, or whether they are merely illustrative.
Evidence to check Decision papers, capex requests, procurement cases, strategy papers, or board/committee packs showing the figure influencing a choice; sign-off notes; links between the figure and the final decision.
We have stated the price level we used for each relevant calculation, and the amounts are consistent with the underlying working papers.
Risk An assurer may test whether the stated level matches the calculations, whether units are clear, and whether any different rates were applied without explanation.
Evidence to check Calculation schedules; model outputs; unit conventions; source files showing the rate applied; review notes confirming the published amount matches the working papers.
We have made clear whether we used a notional planning price, an internal charge, or a levy-style mechanism, and we can show how that mechanism operates in practice.
Risk An assurer may ask whether the mechanism is described accurately and consistently, and whether the label used in the report matches the way the organisation actually applies it.
Evidence to check Methodology paper describing the mechanism; finance or treasury procedures; internal charging or transfer pricing documents; examples of postings or allocations; governance approval for the mechanism.
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.
Where drafts go wrong
Mistakes to avoid and where judgement is needed
The left column is what preparers get wrong while collecting; the right column is where you will have to make and explain a judgement.
Mistakes to avoid
- Wrong ownerThe request goes to the sustainability team instead of the finance, strategy, or project lead who actually holds the pricing records.
- Framework language firstPeople ask for the data using disclosure labels rather than the business terms the team uses for carbon pricing in day-to-day work.
- No boundary setThe collection starts without agreeing which business units, projects, or decision processes are in scope, so the dataset is incomplete or over-wide.
- Wrong time basisThe team pulls figures from a different reporting period or decision date than the one used when the price was applied.
- Mixed counting basisShadow pricing and any internal charge or levy are blended together even though they are tracked and used for different purposes.
- Source labels lostThe original file names, system tags, or spreadsheet headings are stripped away, making it hard to trace where each price figure came from.
- Separate groups mergedDifferent use cases, price levels, or decision types are combined into one pool even though they should be kept apart for reporting.
- Evidence trail missingThe collector saves the numbers but not the supporting notes, assumptions, or approval record needed to show how the figures were assembled.
- No sign-off recordThe final pack is circulated without a named reviewer or approval trail, so nobody can show who checked the data before it moved on.
Judgement needed
- What sits inside the reporting boundary after a buy-in or saleSet a clear cut-off for newly acquired or disposed operations, explain whether you use opening, closing, or average coverage for the period, and note any parts of the business left out because the boundary changed.
- Different country teams using different price labelsIf local units use different names or methods for the same carbon cost signal, map them to one group-wide description, explain the differences, and show how you kept the comparison consistent across locations.
- Units close to the edge of scopeDecide whether small entities, joint arrangements, or newly formed activities are included in the price-use analysis, and disclose the rule used for borderline cases so readers can see why some items were in or out.
- Choosing the timing basis for the price levelState whether the price shown is taken at the date of decision, the reporting date, or another point in time, and explain any averaging or updating approach used across the period.
- Using estimates where direct records are incompleteWhere the price signal is not fully captured in system records, say which figures are estimated, what source data supported them, and how you distinguished estimates from measured amounts.
- Rounding and presentation of price levelsExplain the rounding rule used for the price figures, keep it consistent across the disclosure, and make sure the rounded numbers still align with the underlying totals and decisions described.
- Aggregating sensitive detail for privacy or commercial reasonsIf you combine or blur site-level or team-level information to protect confidentiality, say what has been grouped, why the aggregation was needed, and how the summary still reflects the decisions influenced.
- Linking the price signal to the decisions it shapedFor each price level or price type, identify the business choices it affected, and if more than one decision was influenced, explain the basis for linking the same price signal to each one.
- Separating a shadow price from an internal charge or levyIf you use both a notional carbon value and an actual internal charge, describe each one separately, explain how they differ in purpose and use, and avoid combining them in a way that hides the method.
Examples
How it reads on the page
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative only: our group uses an internal carbon charge to steer capital spending and operating choices. We apply a shadow carbon price of £85 per tonne of CO2e to 100% of new project appraisals, while a separate internal levy of £40 per tonne of CO2e is used for 60% of business-unit budgets; the levy covers 12 of 20 units, and 6 of those 12 also use the shadow price in local planning. The price signals have influenced 14 investment decisions this year, including 9 equipment upgrades, 3 logistics changes and 2 product-design changes; the remaining 6 decisions were informed by the same pricing approach but did not change the final option selected.
This synthetic example shows how a reporter can explain where carbon pricing is used, what level is applied, how much of the business it reaches, and which choices it has affected, while distinguishing a planning price from an internal charge.
Illustrative only: our company uses carbon pricing in procurement and store operations to shape day-to-day decisions. We apply a shadow price of £70 per tonne of CO2e to 80% of supplier tenders and a separate internal fee of £25 per tonne of CO2e to 100% of store energy plans; the shadow price covers 16 of 20 tenders, and the fee covers 240 of 240 stores. During the year, the pricing approach affected 11 decisions in total: 7 supplier selections, 2 refrigeration replacements and 2 store-opening plans.
This synthetic example demonstrates a second plausible pattern: one price used for external sourcing decisions and another for operational planning, with clear coverage and a short list of decisions that were changed or shaped by the pricing signal.
Quality ladder
- Basic
We used an internal carbon price of £50 per tonne.
- Better
We applied a £50 per tonne shadow price to our 2026 capital planning and project screening, using it for all Scope 1 and 2 emissions and not as an internal charge or tax.
- Best
We used a £50 per tonne shadow price in 2026 for capital planning, project screening and long-term scenario work across Scope 1 and 2, and we did not use it as an internal fee or tax; the same level was applied throughout the year because our assumptions and investment pipeline were unchanged, and it influenced site upgrade timing and low-carbon equipment choices.
Check your understanding
Scenarios to work through
A group finance team uses a notional carbon price in project appraisal for two business units, but one smaller unit still relies on a separate internal charge for emissions. The reporting pack also shows that the price is applied only to capital projects above a set threshold.
An energy company applies a carbon assumption only to new investment cases in one division, while the rest of the group uses no carbon price at all. The draft note says the price is used across the whole business, which is not accurate.
A manufacturer uses a carbon price in capital allocation, procurement screening, and product design choices. The draft disclosure mentions the price level but leaves out the decisions it actually shaped, even though the investment committee relied on it in several cases.
A utility group uses two different carbon values: one is a planning assumption for long-term projects, and the other is an internal levy collected from operating units. The draft note lists both numbers but does not explain which is a planning value and which is a charge passed through the business.
Real reports
How 3 companies report it
Examples of full and partial reporting practice. These are evidence-led reviews, not exact disclosure templates to copy.
Woori Financial Group Inc.
Partial
Hang Lung Properties Limited
Partial
Taiwan Cooperative Financial Holding Co., Ltd.
Partial| Field | Woori Financial Group Inc. | Hang Lung Properties Limited | Taiwan Cooperative Financial Holding Co., Ltd. |
|---|---|---|---|
| Carbon price uses | Not found | Partial | Not found |
| Scope and assumptions | Not found | Not found | Not found |
| Affected decisions | Not found | Not found | Not found |
| Price level | Not found | Not found | Not found |
| Internal charge method | Not found | Not found | Partial |
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Advice, not assurance
Framework references
Relevant IFRS / ISSB requirements and related disclosures
IFRS / ISSB
s2-29-f
within IFRS S2: Climate-related Disclosures
Guides that settle this question
Related & explore
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FAQ
Questions this page answers
Start with the plain-language explainer, then work through the page’s step-by-step preparation section and the listed datapoints: carbon price uses, scope and assumptions, affected decisions, price level, and internal charge method. The page is designed to help you turn those inputs into a draft disclosure and an evidence pack.
The page says to prepare five datapoints: carbon price uses, scope and assumptions, affected decisions, price level, and internal charge method. Use those as your minimum data checklist before drafting.
The page is aimed at sustainability/ESG managers, HR or data owners, and assurance reviewers, so ownership should sit with the person who can explain the data, the method, and the evidence behind it. The workbook and evidence-pack sections are there to help you assign and document that ownership.
The page includes an evidence pack with five items for assurance readiness, alongside five assurance claims to verify. Use those materials together so you can show the claim, the risk, and the supporting evidence in a clear trail.
The page says there are five assurance claims to verify, each linked to a claim, risk, and evidence view. Use that section to test whether your draft is supported and whether the evidence pack is complete.
The page lists common reporting gaps and mistakes, so it is useful as a pre-submission check. Review those gaps against your draft to catch missing scope, weak assumptions, or unsupported statements before sign-off.
The Download Centre includes a Prep & Assurance workbook in .xlsx format, which is meant to support preparation and assurance readiness. Use it to organise the datapoints, evidence, and draft content before you finalise the disclosure.
The Download Centre also includes a printable Library Card in .pdf format. It is a practical companion for working through the page’s guidance, especially if you want a quick reference while preparing the disclosure.
Yes, the page includes synthetic illustrative example disclosures, including a quantitative table, which can help you see how the disclosure might look in practice. Treat it as a drafting aid only and make sure your own figures, scope, and wording match your organisation’s data.
The page has a draft-output section with visualisation ideas, narrative starters, and a content-index line. Use those to convert the prepared datapoints into a clear draft and then check it against the evidence pack.
The page notes ESRS E1 (Climate Change) as the closest ESRS correspondence, so it can help you think about reuse of data across frameworks. It does not say the requirements are identical, so use it as a practical cross-check rather than a one-to-one mapping.
More questions this page can help with