5 Costly Mistakes PLCs Make with IFRS S2
The introduction of IFRS S2 Climate-related Disclosures marks a pivotal shift in how Public Listed Companies (PLCs) must approach sustainability reporting. No longer just a voluntary exercise, climate disclosures are now a mandatory component of financial transparency—backed by regulatory enforcement from Bursa Malaysia and global investor expectations. Yet, despite the urgency, many businesses are falling into avoidable traps that waste time, inflate costs, and expose them to compliance risks.
Let’s explore the five most common—and costly—mistakes PLCs make when preparing IFRS S2 reports, along with actionable solutions powered by AI-driven sustainability reporting.
Mistake #1: Overlooking the Full Scope of Emissions Reporting
Many PLCs mistakenly assume that tracking Scope 1 (direct emissions) and Scope 2 (purchased energy) is sufficient for IFRS S2 compliance. However, the standard explicitly requires disclosure of Scope 3 emissions—those generated across the supply chain—if they are deemed material. Ignoring this requirement not only risks non-compliance but also leaves companies vulnerable to investor skepticism.
How Carbon GPT Helps:
Our AI-Sustainability Reporting (AI-SR) tool, designated for Bursa Malaysia’s CSI Platform, automates Scope 3 calculations by integrating procurement data and industry benchmarks. This eliminates manual errors and ensures audit-ready disclosures.
Mistake #2: Superficial Climate Risk Assessments
IFRS S2 demands forward-looking climate risk analysis, including scenario modeling (e.g., 2°C temperature rise impacts). Many PLCs rely on generic templates, resulting in disclosures that lack credibility.
How Carbon GPT Helps:
Our platform simulates climate risk scenarios using real-time data, predicting financial impacts on operations and supply chains—turning compliance into strategic foresight.
Mistake #3: Relying on Manual Data Processes
Spreadsheets and email chains lead to version chaos and last-minute errors. IFRS S2’s granularity exposes these flaws, delaying submissions.
How Carbon GPT Helps:
By syncing with ERPs and utility meters, our AI-powered platform auto-fills disclosures in the correct format, cutting reporting time by 70%.
Mistake #4: Treating Compliance as a One-Time Exercise
Many PLCs treat IFRS S2 as an annual checkbox, missing opportunities to improve sustainability performance.
How Carbon GPT Helps:
Real-time dashboards track KPIs year-round, identifying risks early and turning compliance into competitive advantage.
Mistake #5: Underestimating Auditor Scrutiny
Vague claims without verifiable data trails trigger costly revisions.
How Carbon GPT Helps:
Every disclosure includes data provenance, confidence scoring, and audit logs—ensuring transparency for regulators and investors.
The Future of IFRS S2 Reporting is AI-Driven
As Bursa Malaysia’s AI reporting partner, Carbon GPT helps PLCs automate compliance, reduce costs, and unlock strategic insights.
🚀 Ready to simplify IFRS S2? Click here to kick off your journey today!