IASB launches new project to explore climate-related risk reporting in financial statements

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Mar 23, 2023

On March 23, 2023, the IASB has launched a new project aimed at exploring ways for entities to provide better information about climate-related risks in their financial statements. The project was initiated in response to feedback from the IASB’s recent Agenda Consultation.

During the IASB’s meeting this week, the project was discussed for the first time. Outcome of deliberations during the meeting were that the IASB will consider the work of the ISSB to ensure that any proposals complement the IFRS Sustainability Disclosure Standards (expected by the end of the second quarter of 2023). In addition, the IASB will (1) conduct research to determine how much the educational materials published in 2020 are helping entities reflect the effects of climate-related risks in their financial statements and (2) consider what further actions can be taken to improve information about these risks.

In a statement regarding the project, IASB Chair Andreas Barckow said: “Feedback from our Agenda Consultation indicates a desire for us to go further. Therefore, we are initiating this project, informed by the ongoing work of our colleagues on the ISSB.”

The project is part of a wider effort by IASB and ISSB to work together to ensure connectivity in both their products and processes. Sustainability-related financial disclosures and financial statements complement each other, with the former providing early indications of matters that will subsequently be reflected in financial statements. Achieving connectivity in reports requires consistency in language, compatibility of concepts, and no gaps or unintended overlaps between IASB and ISSB Standards and digital taxonomies. This journey is still in its early stages, and feedback from stakeholders will be taken into account in the ISSB’s forthcoming consultation on agenda priorities.

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