CDSB welcomes call from global investor groups to reflect climate-related risks in financial reporting

CDSB welcomes letter by investors calling for climate-related risks to be considered a material factor.

CDSB welcomes the letter by investor groups yesterday confirming the view that “climate-related risks are considered a material factor and thus should be reflected appropriately in financial statements.”

CDSB was born at the World Economic Forum meeting in Davos in 2007 with the establishment of a new international consortium of business and environmental NGOs to create a generally accepted framework for climate risk reporting by corporations – to account for tomorrow’s climate.

The publication of the TCFD recommendations in recent years has seen an increase in the reporting of climate-related matters in mainstream annual reports, this is encouraging progress.  However, thus far the focus has been on building sustainable business narratives, with a lack of climate-related matters embedded into company financial statements, resulting in a disconnect between narrative and financial reporting.

The IASB paper published in November 2019 confirmed that under current IFRS standards an assessment of climate-related risks should be incorporated into preparation of financial statements and how this should be done.

Preparers should now be aware of the expectations set by investors when it comes to inclusion of climate-related matters within financial reporting and the IASB paper clarifies what is possible within the scope of the IFRS accounting standards as they are written.

The CDSB has set up a Climate Accounting Standards Group tasked with developing the practice guidance and examples to support preparers who are starting out in integrating climate-related matters within the financial statements, to be published later this year.

To hear more about our work in this area please contact our Technical Manager Sundip Jadeja at .