Corporate Empire – The resource center on the financial reporting impacts of climate change. All companies are facing climate-related risks and opportunities and are making strategic decisions in response – including around their transition to a low-carbon economy. These climate-related risks and strategic decisions could impact their financial statements – and KPIs.
Once a company has analyzed the risks and opportunities of climate change for its business, it is in a position to implement the 11 disclosure recommendations of the Task Force, which relate to the following core areas of a company’s business:
- Risk management
- Metrics and targets
Significant global attention on how business and capital markets are responding to the climate crisis, including increasing regulatory and investor scrutiny, challenges professional accountants—in business and in professional practice—to play an active role in determining the way climate change information is reported in the upcoming 2021 reporting cycle and is enhanced in future years. Although financial reporting standards have not changed, investors and other stakeholders now consider climate change to be a material issue that can have financial consequences for most companies.
To address these demands, professional accountants have a critical role in
- Aligning and integrating climate-related information and disclosures with company climate commitments, targets, and strategic decisions.
- Quantifying, wherever appropriate, financial impacts of climate issues.
- Ensuring climate-related reporting complies with reporting requirements without material omissions or misstatements, based on a company-specific materiality determination.
- Supporting global initiatives to enhance climate and broader sustainability-related reporting through standards set by a new International Sustainability Standards Board (ISSB) that will address material impacts on a company’s enterprise value.