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January 2019

EC expert group issues report on disclosure of climate-related information

Jan 10, 2019

In January 2019, the Technical Expert Group on Sustainable Finance set up by the European Commission (EC) published its first report on companies' disclosure of climate-related information. It contains recommendations that will allow the EC to update its non-binding guidelines on non-financial reporting with specific reference to climate-related information, in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability Board.

The report marks another step in the implementation of the EC's action plan on sustainable finance published in March 2018 and follows up on the EC's legislative proposal on the disclosure of climate-related information presented in May 2018.

The report contains proposals for disclosing not just how climate change might influence the performance of a company, but also the impact of the company itself on climate change.

The guidance proposed in the report intends to assist companies in developing high quality climate-related disclosures that comply with the Non-Financial Reporting Directive and address the recommendations of the TCFD. Specific disclosures and guidance are described under each element of the Non-Financial Reporting Directive requirements, including metrics for all in-scope companies, for non-financial companies, and for banks and insurance companies. In doing so, the report distinguishes between three types of disclosure:

  • Type 1 disclosures – those that companies should disclose (high expectation that all reporting companies disclose them)
  • Type 2 disclosures – those that companies should consider disclosing (expected of companies with significant exposure to climate-related risks and opportunities)
  • Type 3 disclosures – those that companies may consider disclosing (additional or innovative disclosures that provide more enhanced information)

The EC will take the report into consideration when it updates the non-binding guidelines on non-financial disclosure that accompany the Non-Financial Reporting Directive.

Stakeholders are invited to provide with written comments on the report by February 1, 2019.

Review the Report on Climate-related Disclosures on the EC website.

Forum on integrated thinking at the World Economic Forum in Davos

Jan 17, 2019

On January 22-25, 2019, the World Economic Forum (WEF) will hold its annual meeting. This meeting is an annual opportunity for leaders across business and government to come together to discuss solutions to the world’s most pressing economic and social challenges. Deloitte joins these global leaders and participates in discussions and events designed to develop meaningful and measurable solutions to these challenges.

While sustainable profit flows from the pursuit of a broader social purpose, translating it into something that is measurable in as simple and understandable way as we measure profit is not a small challenge. Metrics that explain this remain the "soft underbelly" of corporate communications.

Among Deloitte's WEF Davos activities is therefore a breakfast forum on Inclusive Capitalism on Thursday, January 24.

Panellists Mary Shapiro (Bloomberg/SASB Foundation), Mark Hawkins (Salesforce), Nils Bolmstrand (Nordea Asset Management AB), and Jessica Fries (A4S) will discuss how capital market participants can come together to make the world's financial systems more resilient for achieving sustainable value creation and long-term societal well-being. The discussion will be chaired by Deloitte's Global Chairman David Cruickshank.

Review additional information on Deloitte's WEF Davos activities, including the breakfast forum. All livestream events can be followed through Twitter and Facebook and the events will also be available for subsequent playback.

IASB to consider further potential amendments to IFRS 17

Jan 11, 2019

In January 2019, the International Accounting Standards Board (the Board) released the agenda papers for their upcoming meeting. The Board will discuss 5 of the 25 concerns regarding IFRS 17, "Insurance Contracts" that were identified in October 2018 as candidates for potential amendments. The staff recommends several amendments to the standard.

Applying the criteria for evaluating proposed amendments agreed on in October 2018, the Board is asked to consider the following aspects of IFRS 17:

Issue

Agenda paper with detailed description (link to IASB website)

Comment

Acquisition cash flows for renewals outside the contract boundary

Agenda paper 2A

The staff recommends five amendments to the standard

Reinsurance contracts held: initial recognition when underlying insurance contracts are onerous

Agenda paper 2B, Agenda paper 2C

The staff recommends two amendments to the standard

Contractual service margin: limited applicability of risk mitigation exception (some aspects already discussed at the December 2018 meeting)

Agenda paper 2D The staff recommends one amendment to the standard

Reinsurance contracts held: ineligibility for the variable fee approach

Contractual service margin: coverage units in the general model

Agenda paper 2E

The staff recommends six amendments to the standard

The staff notes that papers on the remaining topics from the list of issues presented at the October meeting will be presented to the Board in the first quarter of 2019.

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