IRSG’s response to the call for evidence of the UK Department for Energy Security & Net Zero (DESNZ) on the benefits, costs, and practicalities of Scope 3 greenhouse gas (GHG) emissions reporting in the UK.

Published 4 Jan 2024

  • We welcome the UK government support for the development of international standards for the disclosure of sustainability-related information.
  • We agree with the approach to Scope 3 reporting contained within IFRS S2 and are also broadly supportive of the ISSB’s approach to materiality. We support full alignment with this approach under UK reporting rules, though we note that there are areas of the ISSB disclosure framework that require clarification, and others that require flexibility in application.
  • We believe that the use of the GHG Protocol for the purposes of Scope 3 reporting within IFRS S2 will lead to comparable and consistent reporting that is useful for investors and users of accounts, but reporting entities should be allowed to apply the Protocol flexibly.
  • We believe that Scope 3 emissions reporting would be beneficial to market efficiency and discipline, but we caution the Government against conflating Scope 3 emissions with transition risk.