IFRS S2 GHG Amendments 2025: What Changed and How to Prepare for 2027

The amendments respond to implementation difficulties in a narrow but operationally important part of IFRS S2. They do not reduce the need for complete, investor-focused GHG information. Instead, they clarify how groups can use mandatory local methods and GWP values, create a more workable Category 15 boundary for financial activities, and improve the transparency of financed-emissions presentation and classification.

The main implementation risk is treating the amendments as editorial wording only. Several changes affect the data model: an entity may need method and GWP fields by group part, a derivative and financial-activity exclusion register, a Category 15 total and financed-emissions subtotal, separate classification systems for different business lines, and comparative-restatement flags. Those changes are difficult to add reliably at the final drafting stage.

Figure 1. IFRS S2 GHG amendments 2025: implementation route to 2027. London Reporting Academy learning visual.

The amended wording makes clear that a jurisdictional authority or exchange can require a different GHG measurement method for only part of an entity. The entity can use that method for the affected part for as long as the requirement applies. This is particularly relevant to multinational groups where a subsidiary or listing segment must follow a statutory emissions method that differs from the GHG Protocol.

The relief should be implemented as a controlled overlay. It does not allow management to select a preferred alternative simply because it is easier, nor does it remove the obligation to disclose Scope 1, Scope 2 and Scope 3 for the entity as a whole. For each alternative method, IFRS S2 requires the method, measurement approach and reasons to be explained.

The amendments add a corresponding relief where a jurisdictional authority or listing exchange requires GWP values different from those otherwise required by IFRS S2. The relief is limited to the affected whole or part of the entity. The data model therefore needs to distinguish the method used to quantify activity from the GWP basis used to convert gases into CO2e.

The new paragraph 29A permits an entity to limit the measurement and disclosure of Scope 3 Category 15 to financed emissions. The amended text identifies loans, project finance, bonds, equity investments and undrawn loan commitments as relevant lending and investment activities, and addresses assets under management for asset managers. Derivatives can be excluded from the financed-emissions measure.

The election needs a formal boundary policy. It should identify what the entity treats as financed emissions, how it defines derivatives, which other financial activities are excluded, and how those decisions are applied across legal entities and business lines. The policy should not be confused with the separate industry-specific financed-emissions disclosures for asset management, commercial banking and insurance.

When Category 15 is included in the Scope 3 measure, paragraph 29C requires the total Category 15 greenhouse gas emissions and the financed-emissions subtotal within that total. This matters even where the two numbers are identical: the structure makes the relationship visible and supports digital tagging, reconciliation and review.

For commercial banks and insurers, the amendments refine the basis for choosing an industry-classification system. The system must enable users to understand the entity’s exposure to transition risk by industry. If several systems would be equally useful, a commonly used system is prioritised. The entity identifies the system and explains why it was selected. Banking and insurance activities within one group can use different systems if that better serves the disclosure objective.

This changes the control question from “Which code is easiest to extract?” to “Which classification best explains transition-risk concentration?” The implementation record should preserve the classification system, version, mapping from counterparties or issuers, overrides, unclassified balances and rationale by business line.

The amendments apply to annual reporting periods beginning on or after 1 January 2027. Early application is permitted, and the entity discloses that it has applied the amendments early. A decision to early apply should be made as a package: selective application of only convenient parts can produce internally inconsistent disclosures.

For an entity that has previously applied IFRS S2, the amended transition provisions require the preceding comparative period to be adjusted for specified effects, unless it is impracticable. Those effects include changes associated with the measurement method and GWP reliefs, the Category 15 total and financed-emissions subtotal, and the industry-classification system. The impracticability conclusion should be specific, evidenced and approved; it should not be used as a generic data-gap label.

Context. Northbridge Banking Group has applied IFRS S2 voluntarily since 2025. Its home jurisdiction requires a national GHG method for one regulated bank, while the rest of the group uses the GHG Protocol. The group previously included several facilitated and derivative-related activities within Category 15 and used a proprietary sector classification built for credit risk.

Decision. For the 2026 annual period, management elects early application of the December 2025 amendments. It maps the national method and required GWP values to the regulated bank only, limits Category 15 to financed emissions, documents derivatives using its financial-instrument taxonomy, excludes specified facilitated activities from the financed-emissions measure, and adopts a commonly used industry system that better explains transition-risk exposure.

Comparative effect. The team recalculates the 2025 comparative for the Category 15 total, financed-emissions subtotal and classification disaggregation. It can reproduce the method and GWP adjustments for most entities, but one acquired portfolio lacks sufficient instrument history. The team assesses whether restatement is impracticable for that specific element, documents the evidence and drafts a precise limitation rather than declaring the whole comparative unavailable.

Context. Illustrative existing IFRS S2 reporter applying the December 2025 amendments early.

Why the wording is useful

Evidence needed

Early-application governance approval and source-version record.

Method and GWP legal-basis matrix by group part.

Category 15 boundary policy, derivative taxonomy and excluded-activity register.

Scope 3, Category 15 and financed-emissions reconciliation.

Industry-classification selection memo and mapping controls.

Comparative recalculation workbook and specific impracticability evidence.

Disclosure-review and digital-tagging sign-off.

Practical consequence. Financial institutions still need a complete Scope 3 assessment, a controlled Category 15 boundary, asset-class and industry data, coverage and exclusion disclosures, and a comparative plan.

Prerequisite: GHG Protocol and IFRS S2: Organisational Boundaries, Methods and Required Disclosures

Scope 2 implementation: IFRS S2 Scope 2 Disclosure: Location-Based Emissions and Contractual Instruments

Scope 3 implementation: IFRS S2 Scope 3: How to Assess All 15 Categories and Improve Data Quality

Financial-sector implementation: IFRS S2 Category 15 and Financed Emissions: What Financial Institutions Must Report