CDSB issues new guidance on integrating climate-related matters into financial reporting

Dec 23, 2020

 

The CDSB has issued new guidance on the disclosure of the financial effects of climate-related issues on a company’s financial statements.

This guidance will seek to address three main questions:

  1. Are climate-related matters relevant to financial reporting?
  2. How should climate-related matters be factored into a company’s financial reporting and what this might look like?
  3. What steps can companies take to integrate material climate-related matters into financial reporting?

This guidance is not intended to create new accounting standards; rather it will help finance and accounting professionals to ensure that companies account for material climate factors based on current International Financial Reporting Standards (IFRS) Standards. In this way the companies will provide the financial-related information investors are demanding about profits and valuations that reflect climate-related risks and events.

The Climate Disclosure Standards Board (CDSB) is an international consortium of business and environmental NGOs. Disclosures like those on which the CDSB has just issued guidance will continue to be driven by a combination of investor-demand and mandatory climate reporting which is on the agenda of governments and regulators in various countries.