Today, IFAC is issuing a statement to the Global Accountancy Profession on Corporate Reporting: Climate Change Information and the 2021 Reporting Cycle. In response to significantly increasing investor demand and regulatory attention on climate-related reporting, this is a call to action to professional accountants to play an active role now in determining the way climate change information is reported in the 2021 reporting cycle and beyond. The increased involvement of accountants and auditors in climate-related reporting will help to bring investors greater transparency and insights on the financial impacts of climate change on organizations.
The Statement highlights the current information concerns of investors, regulators and policy makers, reviews standard-setter responses, and recommends how companies and accountants can address these concerns through:
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.
We encourage professional accountancy organizations to utilize this Statement in their communications with members to promote their critical role in ensuring companies understand and communicate climate-related financial impacts. As we’ve stated in earlier communications to the profession: no one is better equipped than professional accountants to lead this important work.
This Statement follows IFAC’s Climate Action Point of View, issued in December 2019, which highlights climate change as an urgent, global issue and outlines the influence and responsibility that IFAC’s 180 member organizations and their 3.5 million professional accountant members have in driving climate change mitigation, adaptation and reporting. With this Statement, we continue to advocate and support the profession’s role in enabling climate action and assisting organizations as they develop their climate commitments and consider ways to decarbonize business models.