Disclosure focus
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.
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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Linked gross target
Sustainability / climate strategyIf a net target is reported, capture the matching gross target that sits behind it, so the relationship between the two is clear.
Evidence Target-setting paper, emissions plan, board paper, or approved KPI schedule showing both figures and how they connect.
Watch for The net target is reported without the gross target it is meant to sit alongside, so the underlying baseline and ambition cannot be traced back to the source plan.
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Credit use reliance
Sustainability / carbon accountingCapture whether the target or claim depends on carbon credits, and the extent of that dependence in the reported period or target design.
Evidence Offset procurement records, retirement certificates, target methodology note, or emissions inventory showing credit use.
Watch for Credit reliance is stated from a different source than the target calculation, so the reported dependence does not reconcile to the retirement or procurement record.
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Credit quality basis
Sustainability / procurementCapture the type of credits used or assumed, plus the quality or integrity conditions the reporter says those credits must meet.
Evidence Credit policy, supplier due diligence, registry documentation, or methodology note setting out accepted credit types and quality screens.
Watch for The credit type is described using a different category than the one used in procurement or registry records, so the integrity assumptions do not match the actual credits held or planned.
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Covered gases
Carbon accounting / sustainabilityCapture which greenhouse gases are included in the reported figure or target, using the same gas set throughout the calculation and disclosure.
Evidence Inventory methodology, emissions workbook, or calculation model showing the gases included in the total.
Watch for The gas list is taken from a different calculation basis than the inventory, so one or more gases are omitted or added outside the reported scope.
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Reporting basis
Carbon accounting / reportingCapture whether the figure is built on a gross basis or a net basis, and keep that basis consistent across the disclosure and supporting calculations.
Evidence Methodology note, KPI schedule, or emissions model showing whether removals, offsets, or other adjustments are included.
Watch for Gross and net figures are mixed, so the reported number does not reconcile to the underlying calculation model or management dashboard.
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Included scopes
Carbon accounting / sustainabilityCapture which emissions scopes are included in the reported figure or target, and make sure the same scope set is used in the source calculation.
Evidence Inventory boundary note, emissions workbook, or target methodology showing the included scope categories.
Watch for The scope set is not aligned with the inventory boundary, so a scope is left out or counted twice in the reported total.
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Sector method
Climate strategy / sustainabilityCapture the sector-specific method used to set or assess the target, including the named approach and the assumptions that go with it.
Evidence Target-setting methodology, sector pathway document, or external framework note used by the business.
Watch for The sector method is described using a different pathway or category than the one used in the target model, so the reported approach does not match the underlying methodology.
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Assurance provider
Finance / sustainability reportingCapture who performed the verification or certification, and whether that party is the actual external provider named in the evidence trail.
Evidence Assurance statement, certificate, engagement letter, or verifier report naming the provider and the covered period.
Watch for The named verifier or certifier does not match the assurance statement or certificate on file, so the reported provider is not the one that actually signed off.
Before you start
- Before drafting, have you settled which emissions sources sit inside the target, and which gases are included or left out?
- Have you decided whether the target is being shown on a gross basis, a net basis, or both, and whether a gross target sits behind any net target?
- Have you pinned down which parts of the value chain the target covers, and whether a sector-specific method is being used?
- If carbon credits are part of the plan, have you fixed how much the target depends on them, and what type of credits and quality checks you will describe?
- Can every figure and statement be traced back to a source, including who checked or verified the target or credit information?
How to prepare it
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.
Formal email template
Subject: Request for target and credit evidence pack for [reporting period] Hi [name/team], We are preparing the climate target disclosure and need the evidence pack for the organisation’s target setting and any carbon credit use. Please send the information for [reporting period] covering: - the target name used internally and the business area it applies to - whether the target is set on a gross basis, a net basis, or both - the emissions coverage and gases included - any linked gross target where a net target is in place - whether carbon credits are part of the plan, and if so, how they are used - the type of credits, the assumptions used to judge their quality, and any screening or approval notes - the sector method or pathway used, if any - the person or team that reviewed, verified, or certified the information Please include the source files, links, or meeting notes that support the figures and wording. This is a training template; please adapt it to your organisation’s own language and check the source material before sign-off. Thanks, [preparer name]
Short Teams / Slack version
Hi [name/team] — could you share the target and credit evidence pack for [reporting period]? We need the internal target wording, coverage, gases, gross/net basis, any linked gross target, any credit use and quality checks, plus the reviewer/assurer details. Please send the source files or links. Adapt to your own terms first, then map for reporting; check the source material before sign-off.
Industry examples
Manufacturing
Context. A plant-led business with an operations team that tracks emissions by site and uses a decarbonisation roadmap.
Adapted request. Please share the site and group target pack for [reporting period]: the reduction target wording, whether it is gross or net, which sites and emissions sources it covers, the gases included, any linked gross target, any carbon credit use, the credit type and screening checks, the pathway used for the manufacturing business, and the reviewer or verifier details.
Example response. Target pack shows a group net target with a linked gross reduction target, covers Scope 1 and 2 across all plants, includes CO2, methane and nitrous oxide, uses no credits in the base plan, and was reviewed by the sustainability lead and an external assurer.
Financial services
Context. A bank or insurer with a sustainability reporting team and a portfolio emissions method alongside operational emissions targets.
Adapted request. Please send the climate target evidence pack for [reporting period]: the internal target wording, whether it is gross, net, or both, the emissions coverage for operations and any portfolio-related target, the gases included, any linked gross target, any carbon credit use, the credit type and integrity checks, the sector method used, and the reviewer or certifier details.
Example response. Pack shows an operational net target with a linked gross target, covers Scope 1 and 2 for offices and data centres, includes CO2e, uses a limited volume of credits for residual emissions, records the screening criteria used for those credits, and notes internal review by the sustainability reporting manager.
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
Download preparation tools for s2-36 with free verified email access for 24 hours. Source-report links remain public.
Check
For each claim, check the evidence
We checked whether the target table separates the gross figure from any net-based target, so the reader can see the two bases distinctly.
Risk The assurer may test whether a net target has been mixed into the gross figure, or whether the split is only implied rather than clearly shown.
Evidence to check Target schedule, drafting notes, internal review mark-up, and the final published table showing separate entries or labels for gross and net-based targets.
We limited the target coverage to the gases actually intended for that measure, and we kept the basis consistent with the underlying calculation file.
Risk The assurer may probe whether the gases listed match the source model and whether any gas was omitted or added without support.
Evidence to check Target methodology paper, emissions inventory mapping, calculation workbook, and sign-off showing the gases included in the disclosed target.
We stated which emissions areas the target applies to, using the same scope boundary as the supporting data pack.
Risk The assurer may check whether the scope boundary in the disclosure matches the operational boundary used in the source data and whether any scope was left out without explanation.
Evidence to check Boundary memo, scope mapping, source data extracts by scope, and reviewer comments confirming the published scope coverage.
We made the basis of the target clear by saying whether it was built from a sector-style pathway or from another internal approach.
Risk The assurer may ask whether the stated basis is supported by the planning papers and whether the wording overstates the method used.
Evidence to check Target-setting paper, pathway analysis, board or management approval pack, and the final disclosure wording showing the chosen basis.
Where a net-based target was used, we set out how much reliance there is on future carbon credits and how those credits are expected to support delivery.
Risk The assurer may test whether the level of reliance is quantified or described consistently, and whether the disclosure matches the planning assumptions.
Evidence to check Target model, credit reliance schedule, assumptions paper, and evidence that the published description matches the approved plan.
For any credits planned for use, we described the type of credit and the checks we used on quality and credibility before publication.
Risk The assurer may probe whether the credit type is specific enough and whether the integrity criteria were actually assessed rather than assumed.
Evidence to check Credit procurement or strategy papers, quality assessment checklist, supplier or project documentation, and internal approval records for the published description.
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 owner, wrong deskThe 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 setTeams 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 mixedSomeone 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 periodThe 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 outDuring 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 mergedTarget 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 vagueThe 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 trailThe pack is assembled without saving the supporting documents, metadata, and sign-off history needed to show who checked what and when.
Judgement needed
- Setting the target boundary after a buy-in or saleUse 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 targetIf 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 locationsWhere 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 offsetsMake 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 storyState 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 estimatesIf 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 residualsSet 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 dataWhen 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
How it reads on the page
Synthetic, written by LRA — not from a company report, not text from any standard.
We describe our emissions plan on a gross basis, then show the smaller net figure after using credits, so the reader can see the underlying reduction path and the offset effect separately.
- Our target covers Scopes 1, 2 and 3 and includes carbon dioxide, methane and nitrous oxide.
- The gross pathway is a 42% cut by 2030 from a 2024 base year; after allowing for credits, the net pathway is 50%. The credit-backed share is therefore 8 percentage points, or 160 ktCO2e out of a 2,000 ktCO2e base.
- We expect to use high-integrity avoidance and removal credits from projects that are independently checked under recognised third-party programmes; the assumptions are that the credits are additional, not double-counted, and remain valid for the period in which we plan to use them.
- A specialist external verifier has reviewed the target design and the calculation approach, and a separate certifier will confirm the credit instruments before retirement.
Illustrative only: shows how to explain a gross target, the linked net outcome, the gases and scopes included, the reliance on credits, the quality assumptions for those credits, and who independently checked the approach.
We set out our climate target on a gross basis first, then explain the net result after planned credit use, so the operational reduction is visible on its own.
- The target applies to Scopes 1 and 2, plus selected Scope 3 categories, and it covers carbon dioxide, methane, nitrous oxide and fluorinated gases.
- From a 1,200 ktCO2e 2025 base, the gross aim is a 30% cut by 2035; the net aim is 35%, with credits contributing the remaining 5 percentage points or 60 ktCO2e.
- We expect the credits to be nature-based removals issued under a recognised registry, and we assume they are independently verified, permanent for the intended holding period, and not already claimed by another party.
- Our target was reviewed by an external assurance provider, and the credit programme itself is certified by an independent body before we count any units.
Illustrative only: shows a different sector using a gross-first presentation, a net outcome supported by credits, the gases and scopes included, the type and quality expectations for credits, and the independent review/certification trail.
Quality ladder
- Basic
I am targeting a 30% cut by 2030.
- Better
I am targeting a 30% cut in our Scope 1 and 2 emissions by 2030 on a gross basis, with no carbon credits counted in that figure.
- Best
I am targeting a 30% cut in our Scope 1 and 2 emissions by 2030 on a gross basis, with no carbon credits counted in that figure, and we use a sector-based pathway, cover carbon dioxide and methane, and have had the target checked by an external verifier; the plan is unchanged this year because our operating mix has not shifted materially.
Check your understanding
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.
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.
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.
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.
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.
Hang Lung Properties Limited
Partial
DBS Group Holdings
Partial
Hyundai Engineering & Construction Co.,Ltd.
Partial| Field | Hang Lung Properties Limited | DBS Group Holdings | Hyundai Engineering & Construction Co.,Ltd. |
|---|---|---|---|
| Linked gross target | Not found | Not found | Not found |
| Credit use reliance | Not found | Partial | Not found |
| Credit quality basis | Not found | Partial | Partial |
| Covered gases | Not found | Not found | Not found |
| Reporting basis | Not found | Not found | Not found |
| Included scopes | Not found | Not found | Not found |
| Sector method | Partial | Partial | Partial |
| Assurance provider | Partial | Partial | Not found |
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Framework references
Relevant IFRS / ISSB requirements and related disclosures
IFRS / ISSB
s2-36
within IFRS S2: Climate-related Disclosures
Guides that settle this question
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FAQ
Questions this page answers
The page says to prepare eight datapoints: 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 that list into your data request and draft plan.
Use it as a working checklist to move from the plain-language explainer to the datapoints, then into the evidence pack and draft output. The page is designed to help you prepare the disclosure, not just read about it.
The page is set up for a sustainability/ESG manager, HR or data owner, and assurance reviewer to work from the same page. In practice, assign ownership for each of the eight datapoints and the evidence pack items so the draft can be built and checked efficiently.
The page includes an evidence pack with five items for assurance readiness, plus six assurance claims to verify with claim, risk and evidence. Use those sections to build a file that shows where each reported point came from and how it was checked.
The page has a section on common reporting gaps and mistakes to help you spot issues before you finalise the draft. Use it alongside the datapoints and evidence pack so you can check for missing scope, unclear basis or weak support.
The draft-output section gives visualisation ideas, narrative starters and a content-index line to help you move from source data to a usable draft. It is meant to help you assemble the disclosure in a practical way, not to replace your own judgement.
The page includes synthetic illustrative example disclosures, including a quantitative table where relevant, so you can see how the information might look in a draft. Treat it as a formatting and structure aid only, and keep your own numbers internally consistent.
The Download Centre includes a Prep & Assurance workbook in .xlsx format. Use it to organise the datapoints, evidence and assurance checks before you write the draft.
The Download Centre also includes a printable Library Card in .pdf format. It is there as a practical reference you can keep alongside the workbook while you prepare the disclosure.
The page says the closest ESRS correspondence is ESRS E1 (Climate Change), so the data may be reusable across workstreams. Use the page as a practical bridge, but do not assume the reporting asks are identical.
Check that the eight datapoints are complete, the five evidence-pack items are in place, and the six assurance claims have supporting evidence. The page’s common mistakes section is also useful for a final pre-assurance review.
More questions this page can help with