Every company faces different climate risks depending on its industry. IFRS S2 is accompanied by industry-based guidance covering 68 industries across 11 sectors, derived from SASB Standards. Entities are required to refer to and consider this guidance, making it a critical input for building sector-specific climate disclosures.
What Is the Industry-Based Guidance?
The IFRS S2 industry-based guidance provides sector-specific climate disclosure topics, metrics, technical protocols, and activity metrics for 68 different industries. It is published alongside IFRS S2 as accompanying (non-mandatory) guidance, not as part of the standard itself.
Important clarification: The industry-based guidance does not create additional mandatory disclosure requirements beyond IFRS S2 itself. However, IFRS S2 paragraphs 12 and 32 require entities to refer to and consider the guidance when preparing disclosures. An entity that considers the guidance and concludes a particular topic or metric is not material to its circumstances need not disclose it, but must have considered it.
Structure of Each Industry Volume (IB3 to IB4)
Each of the 68 industry volumes contains five components:
| Component | Purpose |
|---|---|
| Industry description | Describes the business model to help entities identify whether the guidance applies |
| Disclosure topics | Specific climate-related risks or opportunities typical for that industry |
| Metrics | Quantitative measures accompanying each disclosure topic |
| Technical protocols | Definitions, scope, implementation, and presentation guidance for each metric |
| Activity metrics | Scale-of-operations metrics for normalising and comparing data (for example, revenue per MW installed) |
The Sustainable Industry Classification System (SICS)
The guidance is organised using the Sustainable Industry Classification System (SICS), originally developed by SASB. Entities identify their primary industry using the SICS taxonomy. Multi-industry entities (conglomerates, vertically integrated companies) may need to apply guidance from more than one volume.
The 68 industries span 11 sectors:
| Sector | Example Industries |
|---|---|
| Consumer Goods | Apparel, Appliance Manufacturing, E-Commerce, Retailers |
| Extractives and Minerals Processing | Coal, Iron and Steel, Metals and Mining, Oil and Gas (E&P, Midstream, Refining) |
| Financials | Asset Management, Commercial Banks, Insurance, Investment Banking |
| Food and Beverage | Agricultural Products, Food Retailers, Meat/Poultry/Dairy, Restaurants |
| Health Care | Drug Retailers, Health Care Delivery, Medical Equipment |
| Infrastructure | Electric Utilities, Real Estate, Waste Management, Water Utilities |
| Renewable Resources | Biofuels, Forestry, Solar, Wind |
| Resource Transformation | Aerospace and Defence, Chemicals, Containers and Packaging |
| Services | Hotels and Lodging, Leisure Facilities |
| Technology and Communications | Hardware, Internet Media, Semiconductors, Software and IT |
| Transportation | Airlines, Automobiles, Marine, Rail, Road Transport |
How Disclosure Topics Work (IB5 to IB7)
Each industry's disclosure topics identify the specific climate-related risks and opportunities most likely to be material for entities in that industry. These topics help entities fulfil Para 10's requirement to describe specific, identified risks, not generic climate risk statements.
Example: Automobiles (Volume 63)
Disclosure topic: Fuel Economy and Use-phase Emissions
This topic could describe either:
- A transition risk, if the entity is slow to adapt to EV demand and tightening emissions regulations
- A climate-related opportunity, if the entity exceeds regulatory standards and captures premium EV market share
Associated metrics:
- TR-AU-410a.1: Fleet fuel economy, by region
- TR-AU-410a.2: Sales-weighted average lifecycle emissions, fleet-wide
- Number of zero-emission, hybrid, and plug-in hybrid vehicles sold
These metrics help fulfil both cross-industry category (d) (climate-related opportunities) and the progress reporting requirement of Para 14(c).
Compatibility with SASB Standards (IB10 to IB11)
The industry-based guidance is explicitly consistent with SASB Standards in terms of:
- Industry classifications
- Disclosure topics
- Metrics and technical protocols
- Activity metrics
SASB metric codes are referenced in the guidance for entities already reporting under SASB. An entity that was disclosing SASB metrics is largely meeting the industry-based guidance requirements, making the transition to IFRS S2 more efficient.
The industry-based guidance works like a professional diagnostic checklist. When a doctor examines a patient with chest pain, they use a protocol specific to that presentation, not a generic health questionnaire. The industry-based guidance provides the climate equivalent: sector-specific "diagnostic checklists" of the risks most likely to be material for entities in that industry. The doctor (entity) still applies professional judgment about which items apply to the specific patient (company), but the checklist ensures nothing critical is overlooked.
The Future of Industry-Based Guidance
The ISSB signalled in the Basis for Conclusions (BC134 to BC138) that it intends to consider making industry-based metrics required disclosures at a future date, through a separate public consultation. Currently, the "refer to and consider" standard applies, but this may become a more prescriptive requirement in future amendments.
Key Takeaways
- 168 industry volumes across 11 sectors provide sector-specific disclosure topics, metrics, technical protocols, and activity metrics derived from SASB Standards
- 2Entities are required to 'refer to and consider' the guidance - not as additional mandatory requirements, but as structured starting points for identifying material risks
- 3Each volume has five components: industry description, disclosure topics, metrics, technical protocols, and activity metrics for normalising data
- 4Multi-industry entities (conglomerates, vertically integrated companies) may need to apply guidance from more than one SICS industry volume
- 5The ISSB has signalled it may convert industry-based metrics from 'refer to and consider' to mandatory requirements through a future public consultation