Investors and regulators are keen to understand how companies are addressing the impact of climate (both transitional and physical). What risks and opportunities have been identified, what assumptions have been made in their analysis and how have strategies been flexed or redefined to minimise risks and maximise opportunities?
Our key financial regulators and standard setters, ASIC, APRA and the ASX Corporate Governance Council, have all recently issued guidance emphasising the importance of considering climate change – not just as a matter of corporate sustainability reported outside of annual reports but as a matter that should be considered as part of the preparation of the annual reports. Guidance developed jointly by the AuASB and AASB indicate a need to describe how material climate risks have been considered in the Financial Statements and therefore be subject to audit.
Assessing how, when and where climate risks and opportunities may impact your business model is a critical first step. Disclosure of these potential impacts and your strategic responses in your Annual Report and Financial Statements is the second.
Climate disclosures within the Annual Report – An Australian focus (PDF 1.9MB) is a guide to help businesses communicate the impacts of climate on their business models, strategy, financial performance, and future prospects in their Annual Reports and Financial Statements. It will help you navigate the different disclosure requirements and recommendations applicable in Australia that may be impacted by climate risks.
Please contact us if you'd like to discuss this report, your climate change strategy or ESGs.