GROUP REPORTING IN A CONVERGING WORLD: NAVIGATING IFRS, IFRS S1 S2, AND GHG PROTOCOL CORPORATE STAND
GROUP REPORTING IN A CONVERGING WORLD: NAVIGATING IFRS, IFRS S1 S2, AND GHG PROTOCOL CORPORATE STAND
How Companies Can Align Financial, Sustainability, and Emissions Reporting Under Emerging Global Standards
Under IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information), a company must report its sustainability-related information for the same group of entities included in its financial statements. This means that if a parent company prepares consolidated financial statements under IFRS—which include the parent and all its subsidiaries—then its sustainability-related disclosures must also cover the same group (the entire consolidated group). In other words, the sustainability-related information should match the financial reporting boundary. This ensures consistency and helps users clearly understand how sustainability risks and opportunities affect the same group that is being reported on financially.
The GHG Protocol Corporate Standard defines “organisational boundaries” as the way a company decides which parts of its business to include when measuring its greenhouse gas (GHG) emissions. This decision is based on a chosen consolidation approach—either:
- The equity share approach (based on the company’s ownership in an operation), or
- The control approach (based on whether the company has financial or operational control).