IFRS S2 · metrics and targets, paragraphs 27–37
IFRS S2 cross-industry metrics: seven categories every company reports
Paragraph 29 of IFRS S2 lists seven metric categories that apply to every entity, whatever its industry.
Industry-based metrics come on top (¶32), and every climate target the entity has set or must meet is described in detail (¶¶33–36).
The seven categories
What each category asks for
| Category | What IFRS S2 requires | Paragraph |
|---|---|---|
| Greenhouse gases | Absolute gross Scope 1, 2 and 3 emissions in metric tonnes CO2e; measured under the GHG Protocol Corporate Standard unless a jurisdiction or exchange requires otherwise; the approach, inputs and assumptions; Scope 1 and 2 split between the consolidated group and other investees; location-based Scope 2; Scope 3 categories; financed emissions where relevant | ¶29(a) |
| Climate-related transition risks | The amount and percentage of assets or business activities vulnerable to transition risks | ¶29(b) |
| Climate-related physical risks | The amount and percentage of assets or business activities vulnerable to physical risks | ¶29(c) |
| Climate-related opportunities | The amount and percentage of assets or business activities aligned with climate-related opportunities | ¶29(d) |
| Capital deployment | The amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities | ¶29(e) |
| Internal carbon prices | Whether and how a carbon price is applied in decision-making (investment, transfer pricing, scenario analysis), and the price per tonne | ¶29(f) |
| Remuneration | Whether and how climate is factored into executive remuneration, and the percentage of executive management remuneration recognised in the period linked to it | ¶29(g) |
Greenhouse gases
Gross, in CO2e, on the GHG Protocol
Emissions are gross, so carbon credits never reduce the reported figure; they appear only in the target disclosures.
The seven constituent greenhouse gases are aggregated into CO2 equivalent using 100-year global warming potentials from the latest IPCC assessment, unless a jurisdiction or exchange requires other values (B21–B22).
Measurement follows the GHG Protocol Corporate Standard so far as it does not conflict with IFRS S2 — for example, IFRS S2 requires Scope 3 even though the Protocol does not (B23).
The entity discloses whether it uses the equity share or control approach and why (B27), and which emission factors it uses, chosen as those that best represent its activity (B29).
Scope 3 and financed emissions are covered in depth on Scope 3 and financed emissions.
“An entity is required to disclose its Scope 2 greenhouse gas emissions using a location-based approach and is required to provide information about contractual instruments only if such instruments exist and information about them informs users’ understanding.”
IFRS S2 ¶B30; market-based figures may be added (B31).
The other six
Amounts, percentages and the link to the accounts
For transition risk, physical risk and opportunities, the entity uses all reasonable and supportable information available at the reporting date without undue cost or effort (¶30).
In preparing all six, it considers its time horizons, where risks concentrate in its business model and value chain, the current financial effects it has disclosed, and whether industry-based metrics could meet the requirement (B65).
It also considers the connection with the financial statements — for example, whether the carrying amounts of assets it uses are consistent with those in the accounts (B65(e), applying IFRS S1 ¶21(b)(ii)).
The IFRS Foundation’s Accompanying Guidance includes illustrative examples for ¶29(b)–(e), which illustrate but do not interpret the standard.
In the first reports under Australia’s IFRS S2-based standard, its regulator found Scope 1 and 2 and internal carbon prices reported consistently across companies, because the standard defines how to measure them (ASIC REP 839).
Industry-based metrics come in addition (¶32), drawing on the industry-based guidance.
Targets
Every climate target, described in full
IFRS S2 requires no target, but every target the entity has set, or is required to meet by law or regulation, is disclosed in this shape.
| Paragraph | What the entity discloses for each target |
|---|---|
| ¶33 | The metric; the objective (for example mitigation, adaptation or conformance with science-based initiatives); the part of the entity covered; the period; the base period; milestones and interim targets; absolute or intensity; how the latest international agreement on climate change informed it |
| ¶34 | Whether the target and its methodology were validated by a third party; the review process; the metrics used to monitor progress; revisions and why |
| ¶35 | Performance against the target, and an analysis of trends or changes |
| ¶36 | For greenhouse gas targets: gases and scopes covered; gross or net, with the gross target always disclosed beside a net one; whether a sectoral decarbonisation approach was used; planned use of carbon credits — reliance, verifying scheme, type (nature-based or technological, reduction or removal) and credibility factors such as permanence |
| ¶37 | The entity “shall refer to and consider” cross-industry and industry-based metrics in choosing target metrics |
Nothing in IFRS S2 requires a target to be validated by the Science Based Targets initiative; ¶34(a) asks only whether a third party validated it.
A net target “cannot obscure information about its gross greenhouse gas emissions targets” (B69), and only planned use of carbon credits must be disclosed, though credits already bought may be described (B71).
In the UK
The same metrics in UK SRS S2
UK SRS S2 carries ¶¶27–37 with the same seven categories and target disclosures; the only Annex A change in this part is “may” rather than “shall” for the industry-based guidance at ¶32, with ¶37 keeping “shall”.
A UK listed company reports these metrics on a comply-or-explain basis from periods beginning on or after 1 January 2027, with a one-year relief for Scope 3 under the FCA’s rules.
Scope 1 and 2 reporting under SECR is a separate legal duty, explained on SECR.
Frequently asked
Cross-industry metrics, answered
What are the IFRS S2 cross-industry metrics?
Seven categories in paragraph 29 that every entity reports on, whatever its industry: greenhouse gases; climate-related transition risks; climate-related physical risks; climate-related opportunities; capital deployment; internal carbon prices; and remuneration.
Does IFRS S2 require an internal carbon price?
No. It requires an explanation of whether and how the entity applies a carbon price in decision-making, and the price per tonne it uses to assess the costs of its emissions (¶29(f)).
An entity that uses no internal carbon price says so.
Does IFRS S2 require market-based Scope 2?
No. It requires location-based Scope 2, plus information about contractual instruments where they exist and inform users’ understanding (¶29(a)(v), B30).
An entity may also disclose market-based Scope 2 (B31).
Does IFRS S2 require climate-linked executive pay?
No. It requires a description of whether and how climate-related considerations are factored into executive remuneration, and the percentage of executive management remuneration recognised in the period that is linked to them (¶29(g)).
The answer can be none.
What must a company say about its climate targets under IFRS S2?
For each target: the metric, its objective, the part of the entity it covers, the period, the base period, milestones, whether it is absolute or intensity, and how the latest international agreement on climate change informed it (¶33); third-party validation and review (¶34); performance against it (¶35); and for greenhouse gas targets the gases, scopes, gross or net, whether a sectoral decarbonisation approach was used, and planned use of carbon credits (¶36).
Can a net-zero target replace gross emissions targets under IFRS S2?
No. A net greenhouse gas target must be accompanied by its associated gross target (¶36(c)), and the net target cannot obscure the gross one (B69).
The entity also explains how far the net target relies on carbon credits and what kind they are (¶36(e)).
Sources
Primary sources
Every figure, date and status on this page traces to the instrument’s owner.
Secondary commentary is never the source for a number.
- IFRS FoundationIFRS S2, full text (December 2025)
¶¶27–37, B19–B31, B64–B71.
- IFRS FoundationIFRS S1, full text
¶50 entity-developed metrics; ¶21(b)(ii) connections with the financial statements.
- IFRS FoundationIFRS S2 Accompanying Guidance (June 2023)
Illustrative examples for ¶29(b)–(e); not part of the standard.
- GHG ProtocolCorporate Accounting and Reporting Standard (2004)
The measurement basis in ¶29(a)(ii).
- GHG ProtocolScope 2 Guidance
Location-based and market-based methods.
- GHG ProtocolCorporate Value Chain (Scope 3) Standard (2011)
The Scope 3 categories disclosed under ¶29(a)(vi).
- Department for Business and TradeUK SRS S2 (PDF), ¶¶27–37
The same metric categories and target disclosures in the UK text.
- Financial Conduct AuthorityPS26/19 (PDF)
UK SRS S2 on comply or explain for listed companies, Scope 3 relief for one year.
- IFRS FoundationISSB issues targeted amendments to IFRS S2 (11 December 2025)
The greenhouse gas reliefs in ¶29(a) and B21–B22.
- ASICREP 839 (21 September 2026, PDF)
Scope 1 and 2 and internal carbon prices were consistent across the first AASB S2 reports; 42.5% linked pay to climate.
- Department for Business and TradeConsultation response (PDF), Annex A
The “may” at ¶32 and the “shall” kept at ¶37.
Continue reading
Read next
Scope 3 and financed emissions
The Scope 3 measurement framework and the financial-sector disclosures.
Industry-based guidance
The 68 industry volumes behind ¶32.
IFRS S2
The climate standard, paragraph by paragraph.
The four pillars
Where metrics and targets sit in the core content.
UK SRS S2
The UK climate standard.
SBTi criteria
Target-setting under the SBTi, which IFRS S2 does not require.