Consultancy Services for Preparing Climate-Related Disclosures Based on ISSB Standards – Gypsum Industry Sector

Climate-Related Disclosures Based on ISSB Standards provide companies with a structured approach for identifying, assessing, managing, and communicating climate-related risks and opportunities. As climate change becomes increasingly relevant to business strategy and financial performance, companies are expected to understand how climate-related factors may affect their operations, supply chains, costs, assets, and long-term prospects.

For the gypsum industry, Climate-Related Disclosures Based on ISSB Standards are particularly relevant because gypsum production can involve energy-intensive processes, raw material extraction, transportation, waste generation, and greenhouse gas emissions.

The International Sustainability Standards Board (ISSB) developed sustainability disclosure standards to improve the quality and comparability of sustainability-related financial information. In relation to climate change, IFRS S2 Climate-related Disclosures provides requirements for companies to disclose material climate-related risks and opportunities that could affect their prospects.

By preparing Climate-Related Disclosures Based on ISSB Standards, gypsum companies can improve transparency, strengthen internal climate-risk management, identify opportunities for operational improvement, and provide more useful information to investors and other stakeholders.

What Are Climate-Related Disclosures Based on ISSB Standards?

Climate-Related Disclosures Based on ISSB Standards refer to the disclosure of information about climate-related risks and opportunities using the sustainability disclosure framework developed by the International Sustainability Standards Board.

The disclosure process helps companies explain how climate change may affect their business model, strategy, financial performance, cash flows, access to finance, and long-term business prospects.

Companies are also expected to explain how they govern and manage climate-related risks, which metrics they use, and what targets have been established.

This provides investors and other users of general-purpose financial reports with more structured information for decision-making.

ISSB Standards and Climate-Related Financial Information

ISSB sustainability disclosure standards are designed to improve the consistency and comparability of sustainability-related financial information.

Two important standards are:

• IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information: Establishes general requirements for sustainability-related financial disclosures.
• IFRS S2 Climate-related Disclosures: Focuses specifically on climate-related risks and opportunities.

For companies preparing Climate-Related Disclosures Based on ISSB Standards, IFRS S2 provides the primary climate-related disclosure framework.

Objectives of Climate-Related Disclosures Based on ISSB Standards

The main purpose of Climate-Related Disclosures Based on ISSB Standards is to provide decision-useful information about climate-related risks and opportunities.

Several important objectives include:

1. Improve Transparency:
   Provide stakeholders with clearer information about how climate change may affect the company.
2. Support Investor Decision-Making:
   Provide relevant information that helps investors understand sustainability-related risks and opportunities.
3. Strengthen Climate Risk Management:
   Encourage companies to identify and assess climate-related risks systematically.
4. Improve Corporate Strategy:
   Integrate climate considerations into business planning and decision-making.
5. Improve Accountability:
   Establish clearer responsibilities for climate-related governance and performance.

Four Core Areas of Climate-Related Disclosures Based on ISSB Standards

Climate-related disclosure is generally structured around four major areas that also reflect the climate disclosure architecture inherited from the TCFD framework.

1. Governance

Companies should explain the governance processes, controls, and procedures used to monitor and manage climate-related risks and opportunities.

Information may include:

• Board oversight.
• Management responsibilities.
• Climate-related decision-making processes.
• Internal accountability.

2. Strategy

Companies should explain how climate-related risks and opportunities may affect their business strategy and financial prospects.

This may include impacts on:

• Business models.
• Operations.
• Supply chains.
• Capital expenditure.
• Operating costs.
• Long-term planning.

3. Risk Management

Companies should disclose the processes used to identify, assess, prioritize, and monitor climate-related risks.

Climate-related risk management should ideally be integrated with broader enterprise risk-management processes.

4. Metrics and Targets

Companies should disclose relevant metrics and targets used to evaluate climate-related performance.

Possible metrics may include:

• Greenhouse gas emissions.
• Energy consumption.
• Renewable energy use.
• Carbon intensity.
• Climate-related capital expenditure.
• Emission reduction targets.

The Gypsum Industry

The gypsum industry has become an important part of the construction-material sector.

Gypsum is widely used because it can be processed into lightweight and versatile construction materials.

The industry includes the production of gypsum-based products used in buildings and infrastructure.

Common gypsum products include boards, sheets, and panels used for interior walls, ceilings, partitions, and other construction applications.

As demand for construction materials increases, gypsum manufacturers also need to consider environmental performance, energy efficiency, climate risk, and sustainability reporting.

Why Climate-Related Disclosures Based on ISSB Standards Matter for the Gypsum Industry

The gypsum industry can be affected by both physical and transition climate risks.

Climate-Related Disclosures Based on ISSB Standards can help gypsum companies understand how these risks may influence production, costs, supply chains, investments, and markets.

For example, energy-price changes may affect manufacturing costs, while extreme weather can disrupt raw material supply or logistics.

Environmental regulations and changing customer expectations may also increase demand for lower-carbon construction materials.

Gypsum Production Process

Gypsum production generally begins with the extraction or procurement of raw gypsum.

The material is then processed through several stages before becoming a finished construction product.

Typical production stages may include:

1. Raw Material Extraction:
   Natural gypsum may be mined and transported to processing facilities.
2. Crushing:
   Large gypsum material is reduced into smaller particles.
3. Grinding:
   Gypsum is ground to obtain the required particle size.
4. Heating or Calcination:
   Gypsum may be heated to remove part of its chemically bound water and produce plaster materials.
5. Mixing:
   Processed gypsum can be combined with water and other additives.
6. Forming:
   The mixture can be formed into boards, sheets, panels, or other products.
7. Drying and Finishing:
   Products may undergo drying, cutting, finishing, and packaging before distribution.

Products of the Gypsum Industry

Several products are commonly manufactured by the gypsum industry.

• Gypsum Board:
  Commonly used for interior walls and ceilings.
• Gypsum Sheets:
  Used for partitions and wall systems.
• Gypsum Panels:
  Used in different construction applications depending on product specifications.

Environmental and Climate Impacts of the Gypsum Industry

Gypsum production can create environmental impacts throughout the product life cycle.

Raw material extraction can affect land and require fuel for mining equipment and transportation.

Manufacturing processes may require electricity and thermal energy for crushing, grinding, heating, drying, and production equipment.

These activities can contribute to greenhouse gas emissions when energy comes from fossil-fuel-based sources.

Waste from production, rejected products, packaging, and transportation can also influence the total environmental footprint.

Greenhouse Gas Emissions in the Gypsum Industry

A greenhouse gas inventory can support Climate-Related Disclosures Based on ISSB Standards by providing measurable emissions data.

Potential emission sources include:

• Fuel used for heating and drying.
• Purchased electricity.
• Transportation of raw materials.
• Product distribution.
• Mining operations.
• Waste treatment.
• Relevant supply-chain activities.

Reliable emissions data helps companies understand their carbon profile and identify major reduction opportunities.

Scope 1, Scope 2, and Scope 3 Emissions

Companies preparing Climate-Related Disclosures Based on ISSB Standards may need to understand greenhouse gas emissions across different scopes.

• Scope 1:
  Direct greenhouse gas emissions from sources owned or controlled by the company.
• Scope 2:
  Indirect emissions associated with purchased electricity, steam, heating, or cooling.
• Scope 3:
  Other indirect greenhouse gas emissions occurring throughout the upstream and downstream value chain.

Understanding these emissions can support climate-risk assessment, target setting, and decarbonization planning.

Physical Climate Risks for the Gypsum Industry

Physical climate risks arise from changes in weather and climatic conditions.

Examples that may affect gypsum companies include:

• Flooding affecting factories or warehouses.
• Extreme rainfall disrupting transportation.
• Heat affecting equipment and workers.
• Water shortages affecting production.
• Extreme weather affecting raw material suppliers.

Climate-Related Disclosures Based on ISSB Standards can help companies explain how these risks are identified and managed.

Transition Climate Risks for the Gypsum Industry

Transition risks arise from economic and technological changes associated with the transition toward a lower-carbon economy.

Examples include:

• Changes in environmental regulation.
• Carbon pricing.
• Higher energy costs.
• New production technologies.
• Customer demand for lower-carbon building materials.
• Investor expectations regarding sustainability.

Climate Opportunities in the Gypsum Industry

Climate-related change can also create business opportunities.

Gypsum manufacturers may identify opportunities through:

• Energy-efficient production.
• Renewable energy.
• Recycled gypsum.
• Reduced material waste.
• Lower-carbon products.
• Sustainable building markets.

These opportunities can be evaluated as part of Climate-Related Disclosures Based on ISSB Standards.

Climate-Related Disclosures Based on ISSB Standards and the Gypsum Industry

Climate-Related Disclosures Based on ISSB Standards allow gypsum companies to provide a structured explanation of how climate-related factors influence their operations.

This may include disclosure of climate governance, risk assessments, strategies, greenhouse gas emissions, targets, and transition plans.

Companies can also explain how climate-related investments may affect capital expenditure, operating expenditure, and long-term financial performance.

Using Climate Scenario Analysis

Climate scenario analysis can help companies evaluate how different future conditions might affect their business.

Gypsum companies may assess scenarios involving:

• Different energy prices.
• Carbon-pricing policies.
• Extreme weather conditions.
• Changes in customer demand.
• New climate regulations.
• Technology transition.

The purpose is not to predict exactly what will happen, but to evaluate whether the company’s strategy is resilient under different plausible conditions.

Reducing the Environmental Impact of the Gypsum Industry

Several strategies can help reduce the environmental impact of gypsum production.

Use Lower-Emission Technology

Companies can improve production systems and adopt equipment that uses energy more efficiently.

Increase Recycling

Gypsum waste can potentially be recovered and reused in appropriate production processes.

Recycling can reduce waste disposal while reducing demand for virgin materials.

Improve Energy Efficiency

Energy conservation can reduce greenhouse gas emissions while also lowering operating costs.

Companies can evaluate:

• Heating systems.
• Dryers.
• Motors.
• Compressors.
• Production lines.
• Lighting.

Use Renewable Energy

Renewable electricity can help reduce Scope 2 greenhouse gas emissions where appropriate.

On-site solar photovoltaic systems or renewable electricity procurement may be considered based on technical feasibility.

Energy Efficiency and Climate-Related Disclosures Based on ISSB Standards

Energy efficiency is particularly important because energy consumption can directly affect both environmental and financial performance.

Companies can establish metrics for energy consumption per unit of production and monitor changes over time.

This can support Climate-Related Disclosures Based on ISSB Standards by connecting environmental performance with business efficiency.

Recycling and Circular Economy in the Gypsum Industry

Recycling can support circular-economy principles within gypsum manufacturing.

Manufacturers may evaluate opportunities to recover production scraps, off-specification material, and other recyclable gypsum waste.

Where technically appropriate, recycled gypsum can reduce raw material demand and waste disposal.

Companies should still ensure that recycled material meets product-quality and regulatory requirements.

Five Companies in Indonesia’s Gypsum Industry

Several companies operate within or are associated with Indonesia’s gypsum and construction-material industry.

1. PT Knauf Plasterboard Indonesia
   Produces gypsum-based building products.
2. PT Jayaboard
   Associated with gypsum boards and construction systems.
3. PT Saint-Gobain Construction Products Indonesia
   Operates within the construction-material sector, including gypsum-related products.
4. PT Sinar Jaya Plasterboard
   Associated with gypsum sheets and boards.
5. PT Wahana Global
   Associated with gypsum products for construction applications.

Each company can have different production technologies, energy profiles, raw materials, markets, and climate risks.

For this reason, Climate-Related Disclosures Based on ISSB Standards should reflect each company’s actual circumstances.

Steps for Preparing Climate-Related Disclosures Based on ISSB Standards

Companies can follow a structured process when preparing Climate-Related Disclosures Based on ISSB Standards.

1. Conduct an Initial Assessment

Evaluate the company’s current climate-related information, governance structure, data systems, and reporting practices.

2. Identify Climate Risks and Opportunities

Identify physical and transition risks that may affect the business.

Companies should also identify climate-related opportunities.

3. Collect Relevant Data

Relevant information may include:

• Greenhouse gas emissions.
• Energy consumption.
• Production data.
• Water use.
• Waste.
• Financial data.
• Climate-related investments.

4. Conduct Climate Scenario Analysis

Evaluate how the company could perform under different climate-related scenarios.

5. Develop Climate Strategies

Develop plans for managing material climate risks and opportunities.

Strategies may include energy efficiency, renewable energy, waste reduction, recycling, and supply-chain management.

6. Establish Metrics and Targets

Create measurable indicators for monitoring climate performance.

Targets may relate to emissions, energy efficiency, renewable energy, waste, or other relevant climate indicators.

7. Prepare and Publish the Disclosure

Organize the information according to the relevant ISSB requirements and communicate it through appropriate corporate reporting channels.

Data Quality for Climate-Related Disclosures Based on ISSB Standards

Reliable climate disclosure depends on reliable information.

Companies should establish clear procedures for collecting, reviewing, and maintaining climate-related data.

Supporting information can include:

• Electricity bills.
• Fuel records.
• Production reports.
• Transportation records.
• Waste data.
• Financial information.

Data-quality controls improve confidence in Climate-Related Disclosures Based on ISSB Standards.

Benefits of Climate-Related Disclosures Based on ISSB Standards

Preparing Climate-Related Disclosures Based on ISSB Standards can provide several potential benefits.

• Improve climate-risk management.
• Improve transparency.
• Support investor decision-making.
• Strengthen corporate governance.
• Improve climate-related data systems.
• Support decarbonization planning.
• Identify operational-efficiency opportunities.
• Improve long-term business resilience.

Climate-Related Disclosures Based on ISSB Standards and Investor Information

Investors need reliable information about risks and opportunities that may affect company prospects.

Climate change can influence operating costs, asset values, supply chains, product demand, financing requirements, and capital expenditure.

Climate-Related Disclosures Based on ISSB Standards can help investors understand how company management is responding to these issues.

Climate-Related Disclosures Based on ISSB Standards and Decarbonization

Climate disclosure can support decarbonization because companies first need to understand their greenhouse gas emissions before establishing reduction strategies.

Gypsum companies can develop decarbonization programs involving:

• Energy efficiency.
• Renewable energy.
• Lower-emission production technology.
• Recycling.
• Transportation optimization.
• Supplier engagement.

How Actia Can Support Climate-Related Disclosures Based on ISSB Standards

Actia can support companies in the gypsum industry when preparing Climate-Related Disclosures Based on ISSB Standards.

Support can include:

1. Consulting and Training:
   Helping company teams understand climate disclosure concepts and ISSB requirements.
2. Climate Risk and Opportunity Assessment:
   Identifying physical and transition climate risks as well as potential opportunities.
3. Greenhouse Gas Assessment:
   Supporting the identification and calculation of relevant greenhouse gas emissions.
4. Climate Strategy Development:
   Developing strategies for improving efficiency and reducing climate-related impacts.
5. Metrics and Target Development:
   Supporting the establishment of measurable climate indicators and targets.
6. Disclosure Preparation:
   Organizing relevant climate information into a structured disclosure aligned with applicable ISSB requirements.

Benefits of Professional ISSB Climate Reporting Assistance

Preparing climate-related financial disclosures requires collaboration across several departments.

Finance, sustainability, risk management, engineering, operations, procurement, and senior management may all need to provide information.

Professional assistance can help coordinate the process, identify information gaps, improve data consistency, and organize disclosure requirements systematically.

Climate-Related Disclosures Based on ISSB Standards for Long-Term Sustainability

Climate-Related Disclosures Based on ISSB Standards should not be treated only as a reporting exercise.

The process can help companies improve climate governance, understand operational risks, identify financial implications, and develop more resilient business strategies.

For the gypsum industry, important areas can include energy efficiency, greenhouse gas reduction, raw material management, recycling, operational resilience, and lower-carbon production.

The Future of Climate-Related Disclosures Based on ISSB Standards in the Gypsum Industry

Climate-Related Disclosures Based on ISSB Standards can provide a structured framework for gypsum manufacturers seeking to understand and communicate climate-related risks and opportunities.

Companies can begin by establishing reliable greenhouse gas and energy data, assessing climate risks, evaluating future scenarios, and integrating climate considerations into corporate strategy.

Governance ensures that management responsibility is clearly established.

Strategy connects climate change with business planning and financial performance.

Risk Management provides a process for identifying and responding to physical and transition risks.

Metrics and Targets allow companies to measure progress over time.

For the gypsum industry, the disclosure process can also reveal opportunities to reduce energy consumption, improve recycling, optimize raw material use, adopt renewable energy, and develop lower-carbon construction materials.

Ultimately, Climate-Related Disclosures Based on ISSB Standards can help companies move from general climate commitments toward structured, measurable, and decision-useful climate information.

Actia can assist companies in preparing Climate-Related Disclosures Based on ISSB Standards that are aligned with their business characteristics and climate-related priorities. Click here to discuss Climate-Related Disclosures Based on ISSB Standards with Actia.