Wee-Kean Fong’s Post

Very happy to share this important partnership between GHG Protocol and ISSB. It's a major milestone towards harmonizing reporting requirements for companies.

Excited to share the GHG Protocol Scope 3 Final Summary Report and Proposal Summary. This serves as an important basis for the upcoming updates to the Scope 3 Standard. Kudos to the team!

I know recently there have been a lot of debates around Scope 3. I must say that I was so encouraged after attending the 2024 Budweiser APAC Glass Supplier Convention. AB InBev invited its glass suppliers from several countries in the Asia-Pacific region to China and one of the key agendas was about Scope 3 emissions reduction strategy. Over the past years, they have been very actively engaging with their suppliers to mitigate their upstream Scope 3 emissions. Their target is to reduce carbon emissions by 25% across their value chain by 2025 and achieve net zero by 2040. Find out more about their climate strategy here: https://lnkd.in/gDkNCPri

Next year countries are due to unveil their new NDCs. This round of NDCs will extend to 2035 – the midpoint between 2020 and 2050. Research shows that global emissions must cut by 43% by 2030 and 60% by 2035, relative to 2019, in order to be on track towards the 1.5C goal. This article from WRI lays out a five-point plan for the next NDCs: - Setting ambitious emissions-reduction targets aligned with the 1.5 C limit - Accelerating sectoral transformations - Building resilience across all systems - Catalyzing multi-stakeholder action and investment - Putting people at the center of climate action

On March 29, the Sustainability Standards Board of Japan (SSBJ) released the exposure drafts of its upcoming sustainability and climate-related disclosure standards, which are building on the ISSB standards. Here are some highlights: - On Scope 2, it requires dual reporting of location-based and market-based methods. - On Scope 3, it requires separate reporting for each of the 15 categories of Scope 3 emissions. The current drafts are open for public comment until July 31. SSBJ announcement: https://lnkd.in/gcdK_tH4 Explore draft of climate-related disclosure standard (in Japanese): https://lnkd.in/g_mcgJRY Comparison of ISSB and SSBJ standards (in English): https://lnkd.in/g4WBrha9

Last Friday (4/19), HKEX published conclusions to its consultation on the enhancement of climate-related disclosures. Under the new rules: Scope 1 and Scope 2 GHG emissions disclosure: - All issuers on HKEX: Mandatory disclosure from FY2025 Scope 3 GHG emissions disclosure: - LargeCap issuers (80% of the HSCI composite’s market capitalization): “Comply or explain” from FY2025; Mandatory from FY2026 - Other Main Board issuers: “Comply or explain” from FY2025 - GEM issuers (small and mid-size): Voluntary from FY2025 It is encouraging to see that, out of 115 submissions during the consultation period, 95% were supportive of Scopes 1 & 2 disclosure and 78% were supportive of Scope 3. Hope this trend will soon be expanded to Shanghai, Shenzhen, and Beijing exchanges. HKEX announcement: https://lnkd.in/gvCsgHm6 Consultation conclusion paper, with the final rules: https://lnkd.in/gzAk7wJ9 Implementation Guidance: https://lnkd.in/g_KuP82m

Glad to see this release as scheduled. Another important (draft) adoption of ISSB and GHG Protocol standards, with mandatory reporting for Scopes 1, 2, and 3. Some excerpts related to GHG emissions: ...the entity shall: (i) disclose its absolute gross greenhouse gas emissions...classified as: (1) Scope 1 greenhouse gas emissions;  (2) Scope 2 greenhouse gas emissions; and  (3) Scope 3 greenhouse gas emissions; ...measure its greenhouse gas emissions in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004)... ...for Scope 2 greenhouse gas emissions... disclose its location-based Scope 2 greenhouse gas emissions ...for Scope 3 greenhouse gas emissions... in accordance with the Scope 3 categories described in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011)... ...additional information about the entity’s Category 15 greenhouse gas emissions or those associated with its investments (financed emissions), if the entity’s activities include asset management, commercial banking or insurance... Direct access to the exposure drafts: CSDS 1: https://lnkd.in/gXCCfKnF CSDS 2: https://lnkd.in/gh28JzMj

“The Securities and Exchange Commission today adopted rules to enhance and standardize climate-related disclosures by public companies and in public offerings. The final rules reflect the Commission’s efforts to respond to investors’ demand for more consistent, comparable, and reliable information about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks while balancing concerns about mitigating the associated costs of the rules.” “The final rules require disclosure of Scope 1 and/or Scope 2 greenhouse gas (GHG) emissions on a phased-in basis by certain larger registrants when those emissions are material.” Unfortunately Scope 3 was not included in the final rule, a missed opportunity to significantly scale-up corporate climate actions. Here is the final rule: https://lnkd.in/gVjb2S4g Fact sheet: https://lnkd.in/gqSsCGxd

Mandatory reporting is the way to go. Businesses should not see it as a burden but a way to identify more targeted actions and an opportunity to tap the future market.

Happy to see that Malaysia is considering adopting the IFRSS S1 and S2. Public consultation will be closed on March 21. Here is the consultation paper: https://lnkd.in/gvxyda9C Last week Singapore has already announced that it will implement mandatory climate-related reporting requirements for listed and large non-listed companies in line with the ISSB standards. Interestingly, there will be funding support of up to 30% for companies that will begin making mandatory climate reporting.