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Climate-related disclosures prototype

  • ISSB Image

Nov 03, 2021

On November 3, 2021, the IFRS Foundation released a climate-related disclosures prototype that is the proposal of the Technical Readiness Working Group (TRWG) for the first thematic standard of the ISSB.

The TRWG was created in March 2021 to facilitate a running start of the ISSB. It was designed to integrate and build on the work of relevant initiatives focused on meeting investors’ information needs, with the purpose of providing technical recommendations for consideration by the ISSB. The climate-related disclosures prototype published today is structured around the four TCFD pillars of governance, strategy, risk management, and metrics and targets:

  • Objective: The recommended objective of the prototype is to require an entity to disclose information about its exposure to climate-related risks and opportunities.
  • Scope: The prototype would apply to climate-related risks that the entity is exposed to, climate-related opportunities available to and considered by the entity.
  • Governance: Under the prototype, an entity would disclose information that enables users of general purpose financial reporting to understand the governance processes, controls and procedures used to monitor and manage climate-related risks and opportunities.
  • Strategy: An entity would disclose information that enables users of general purpose financial reporting to understand the strategy for addressing climate-related risks and opportunities as well as the climate-related risks and opportunities that would affect the strategy and the impact of climate-related risks and opportunities on the strategy.
  • Risk management: An entity would disclose information that enables users of general purpose financial reporting to understand how climate-related risks are identified, assessed, managed and mitigated.
  • Metrics and targets: An entity would disclose information that enables users of general purpose financial reporting to understand the entity’s performance in managing climate-related risks and opportunities.

There are two appendices to the climate prototype. Appendix A contains the defined terms used; Appendix B sets out industry-based disclosure requirements, organized by sector and industry. Supplementary technical protocols for disclosure requirements describe industry requirements for climate-related metrics.

Review the climate-related prototype and the supplementary technical protocols for disclosure requirements on the IFRS Foundation's website.

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