IFRS.Report
Consumer Goods & Retail IFRS Industry Guidance
Product lifecycle, packaging, supply chain labor, e-commerce logistics, and customer data risks.
A customer in Tokyo bought a pair of sneakers online. The box arrived in a cardboard carton wrapped in plastic film, sealed with adhesive tape, cushioned with foam inserts, and shipped across three distribution centers before reaching her door. The sneakers themselves had been manufactured in Vietnam from leather tanned in Italy, with rubber soles from Malaysia, laces from China, and packaging from Japan. The carbon footprint of that single pair of sneakers — from raw material extraction to end-of-life disposal — was approximately 14 kilograms of CO₂ equivalent. The customer did not know this. The brand did not disclose it.
IFRS S2's industry-based guidance for consumer goods and retail covers apparel, accessories and footwear; appliance manufacturing; building products and furnishings; e-commerce; household and personal products; and multiline and specialty retailers. Each industry has its own material disclosure topics: product lifecycle impacts for apparel, packaging waste for household products, supply chain labor practices for footwear, data security for e-commerce.
Under IFRS S2 §27–36, consumer goods companies must disclose their Scope 1, Scope 2, and Scope 3 emissions. They must disclose energy consumption, water usage, and waste generation. They must explain how climate-related risks affect their supply chain — a leather tannery in a water-stressed region, a cotton farm facing drought, a distribution center in a flood zone. The 14 kilograms of CO₂ in that pair of sneakers — once invisible — becomes a quantifiable disclosure. The customer may never see it. But the investor will.
Consumer goods climate risk spans the entire product lifecycle — from raw material sourcing to end-of-life disposal, all requiring disclosure under IFRS S2.
In Plain Language
A product's carbon footprint does not end at the factory gate — it extends through packaging, logistics, retail, and end-of-life disposal, with each stage carrying its own disclosure obligations. IFRS S2 §27–36 requires consumer goods companies to disclose Scope 1, 2, and 3 emissions, including the full product lifecycle carbon footprint from raw material extraction through manufacturing, distribution, use, and disposal. The ISSB codified SASB Standards for consumer goods and retail covering apparel, accessories and footwear; appliance manufacturing; building products and furnishings; e-commerce; household and personal products; and multiline and specialty retailers. Each sub-industry carries specific disclosure obligations: product lifecycle carbon footprint across the full value chain for apparel and footwear companies sourcing materials globally; packaging waste, material recovery rates, and circular design initiatives for household product manufacturers; supply chain labor practices and human rights due diligence for companies with multi-tier supplier networks; customer data privacy, cybersecurity governance, and breach response protocols for e-commerce platforms handling consumer financial and behavioral data. Under IFRS S1 §21–24, these risks must be connected to the financial statements — explaining how climate-related supply chain disruptions affect inventory costs, how packaging regulations affect product margins, and how customer data breaches affect brand value. The 14 kilograms of CO₂ in a pair of sneakers — once invisible — becomes a quantifiable disclosure that investors, regulators, and consumers can evaluate.
- Consumer goods climate risk spans the entire product lifecycle — from raw material sourcing to end-of-life disposal, all requiring disclosure under IFRS S2.
- Product lifecycle emissions — the full carbon footprint from raw material to disposal — are the disclosure that makes invisible supply chain impacts visible.
- The practical test is whether a brand can quantify the carbon footprint of a single product and explain how climate risk affects each stage of its supply chain.
Technical Requirements
- Product lifecycle carbon footprint — IFRS S2 §27–36: Consumer goods companies must disclose the carbon footprint of products across their lifecycle, from raw material extraction through manufacturing, packaging, distribution, use, and disposal.
- Packaging waste & circular design — IFRS S1 §21–24: Companies must disclose packaging material volumes, recyclability rates, and circular design initiatives that reduce waste and resource consumption.
- Supply chain labor practices — IFRS S1: Companies must disclose workforce-related risks in their supply chain, including labor practices, working conditions, and human rights due diligence.
- Customer data privacy & security — IFRS S1: Companies must disclose governance of data privacy and cybersecurity risks, including customer data protection measures and breach response protocols.