On February 13, Cheng Lin, Head of the CASI Secretariat and Director at IFS, participated as a panellist in Episode 7 of the Perspectives on Sustainability Disclosure webinar series, organized by IFRS. This session focused on greenhouse gas (GHG) emissions accounting and how organizations can prepare disclosures in alignment with IFRS S2 Climate-related Disclosures.
As jurisdictions increasingly adopt the IFRS Sustainability Disclosure Standards, GHG disclosures are becoming a fundamental component of financial reporting. The session explored how the ISSB Standards facilitate accurate, reliable, and decision-useful emissions reporting and examined the alignment between the Greenhouse Gas Protocol (GHGP) and IFRS S2.
During the discussion, the seminar covered the following topics:
Challenges in Emerging Markets and Developing Economies (EMDEs)
Despite the growing emphasis on climate-related disclosures, organizations in emerging markets face several challenges in GHG emissions reporting:
- Data Limitations – Limited access to reliable activity data and emission factors.
- Technical Capacity – A shortage of professionals with expertise in GHG accounting methodologies.
- Infrastructure Constraints – Inadequate tools and systems for data collection, processing, and reporting.
- Regulatory Uncertainty – Evolving policy frameworks and inconsistent enforcement mechanisms.
These challenges hinder the ability of organizations to produce high-quality, transparent, and decision-useful disclosures that align with international sustainability reporting expectations.
Key Strategies for Strengthening GHG Reporting
To enhance the quality and reliability of GHG disclosures, organizations can adopt the following strategies:
- Capacity Building: Investing in specialized training and technical support to develop local expertise in GHG accounting.
- Development of Regional Emission Factors: Establishing localized emission factors to enhance data accuracy and relevance.
- Technology Integration: Leveraging digital platforms and automated tools to improve data collection, analysis, and reporting.
- Multi-Stakeholder Collaboration: Strengthening partnerships among governments, industries, and non-governmental organizations to facilitate knowledge-sharing and resource development.
By implementing these measures, organizations can enhance the credibility and comparability of their climate-related disclosures, ensuring alignment with international best practices.
The Role of Financed Emissions in Climate Risk Assessment
A key focus of the discussion was financed emissions, which refer to the GHG emissions associated with an entity’s financial activities, including investments, loans, insurance underwriting, and asset management. Unlike operational emissions, financed emissions arise from the companies and projects that financial institutions support.
Why Measuring Financed Emissions is Critical
- Risk Management: Enables financial institutions to assess climate-related risks and opportunities within their portfolios.
- Investor Transparency: Provides investors with insights into the exposure of financial assets to carbon-intensive sectors.
- Regulatory and Standard Alignment: Supports compliance with frameworks such as the Partnership for Carbon Accounting Financials (PCAF), which aligns with the GHG Protocol’s guidance on financial sector emissions accounting.
As financial institutions play a pivotal role in facilitating the transition to a low-carbon economy, the ability to accurately measure and disclose financed emissions is becoming a key component of climate risk management and sustainable finance strategies.
For more info, please visit: https://www.ifrs.org/news-and-events/news/2025/02/join-seventh-episode-webinar-perspectives-sustainability-disclosure/
