IFRS.Report
Technology & Communications IFRS Industry Guidance
Data centers, hardware lifecycle, cybersecurity, semiconductor energy, and platform governance.
A data center operator in Northern Virginia watched his electricity bill climb for the twelfth consecutive month. The facility housed 50,000 servers, each running artificial intelligence models that consumed more power than a small town. The cooling systems alone used 40 percent of the facility's total energy. The operator had a renewable energy procurement plan, but the grid in Virginia was still 60 percent fossil fuel. He calculated the facility's carbon footprint: 200,000 tonnes of CO₂ per year. Equivalent to 43,000 cars. The company's sustainability report did not mention data center energy.
IFRS S2's industry-based guidance for technology and communications covers electronic manufacturing services, hardware, internet media and services, semiconductors, software and IT services, and telecommunication services. Each industry has its own material disclosure topics: data center energy for cloud providers, hardware lifecycle for device manufacturers, semiconductor fabrication energy for chip makers, cybersecurity for software companies.
Under IFRS S2 §27–36, technology companies must disclose their Scope 1, Scope 2, and Scope 3 emissions. For a data center operator, this means disclosing energy consumption and the carbon intensity of the electricity grid. For a semiconductor manufacturer, it means disclosing the energy and water intensity of chip fabrication. For a software company, it means disclosing the energy consumption of cloud infrastructure. The 200,000 tonnes of CO₂ from that Virginia data center — once absent from the sustainability report — becomes a required disclosure. The AI models that power the digital economy have a physical cost. IFRS S2 requires companies to measure it.
Technology climate risk is invisible but massive — data center energy, semiconductor fabrication, and hardware lifecycle emissions that IFRS S2 requires companies to quantify.
In Plain Language
The digital economy has a physical footprint that is growing faster than any sector's ability to decarbonise it. IFRS S2 §27–36 requires technology companies to disclose Scope 1, 2, and 3 emissions — including data center energy consumption measured through Power Usage Effectiveness (PUE), the energy and water intensity of semiconductor fabrication, hardware lifecycle environmental impacts, and electronic waste generation. The ISSB codified SASB Standards for electronic manufacturing services, hardware, internet media and services, semiconductors, software and IT services, and telecommunication services. Data center operators must disclose energy consumption per facility and the carbon intensity of the electricity grid supplying each site — a hyperscale data center can consume as much electricity as a small city. Semiconductor manufacturers must disclose the energy and ultra-pure water intensity of chip fabrication, among the most resource-intensive industrial processes in the world. Device manufacturers must disclose product lifecycle environmental impacts including electronic waste generation, recycling rates, and take-back programme coverage. Software and IT service companies must disclose cybersecurity governance, data protection measures, and how climate-related disruptions — from extreme weather affecting data center operations to energy price volatility affecting cloud infrastructure costs — affect digital infrastructure resilience. Under IFRS S2 §8–24, technology companies must describe how climate-related risks affect their business model: energy costs for data centers, water availability for semiconductor fabrication, supply chain concentration risk for rare earth minerals used in hardware manufacturing. IFRS S1 §21–24 requires these risks to be connected to financial statements — energy cost exposure, capital expenditure on renewable energy procurement, and the financial impact of climate-related service disruptions.
- Technology climate risk is invisible but massive — data center energy, semiconductor fabrication, and hardware lifecycle emissions that IFRS S2 requires companies to quantify.
- Data center energy consumption — the power behind AI models and cloud services — is the disclosure that makes invisible digital infrastructure visible.
- The practical test is whether a technology company can quantify the carbon footprint of its digital infrastructure and explain how climate risk affects its energy supply.
Technical Requirements
- Data center energy & PUE metrics — IFRS S2 §27–36: Technology companies must disclose data center energy consumption and Power Usage Effectiveness (PUE) — the ratio of total facility energy to IT equipment energy.
- Hardware lifecycle & e-waste — IFRS S1 §21–24: Device manufacturers must disclose product lifecycle environmental impacts, including electronic waste generation, recycling rates, and take-back programmes.
- Semiconductor fabrication energy — IFRS S2 §27–36: Semiconductor manufacturers must disclose the energy and water intensity of chip fabrication — among the most resource-intensive industrial processes.
- Cybersecurity & data governance — IFRS S1: Technology companies must disclose governance of cybersecurity risks, data protection measures, and how climate-related disruptions affect digital infrastructure resilience.