Recommendation 7.4 of the new ASX Corporate Governance Council’s Principles encourages entities for the first time to consider and report upon any material exposure to climate change risk. This practical new guide helps you to identify and disclose your climate change risks.

Review the guide on the Governance Institute Australia's website.

The statement includes eight actions which accountants are called upon to take in response to the climate emergency. It also includes commitments from the bodies themselves in support of their members. The call to action highlights that climate change represents an economic, social and business risk – a risk that accountants from across the world must take action on.

Review the call to action on the A4S's website.

The main story of the Annual Meeting was climate-change action to focus on tackling the urgent issue of climate change by committing to net-zero carbon emissions by 2050 or earlier. This urgency was reflected in new data from the Global Risks Report 2020, which included climate threats as the top five risks since its first edition, and the Nature Risk Rising report, which found that $44 trillion of economic value generation is exposed to nature loss. There was also a focus on the sustainability and to bring together leaders of society to address the world’s most pressing challenges. This has an impact on the environment and is another way of fulfilling the mission to improve the state of the world.

Review the overview on the WEF's website.

As reported earlier, Executive Vice President Valdis Dombrovskis of the EC announced in January 2020 that later this year he would present a renewed sustainable finance strategy, which would include a revision of the Non-Financial Reporting Directive (NFRD). The initiative to update the NFRD was launched earlier this month. Today, the EC launched the consultation itself by publishing a consultation document. 

In the introduction to the consultation, the EC makes the following statement:

1. There is inadequate publicly available information on non-financial issues as:
   • a) reported non-financial information is not sufficiently comparable or reliable;
   • b) companies do not report all non-financial information that users think is necessary, and many companies report information that users do not think is relevant;
   • c) some companies do not report such information; and
   • d) it is hard to find non-financial information even when it is reported.
2. Companies incur unnecessary and avoidable costs related to reporting non-financial information.

The consultation document itself contains 45 questions in eight categories:

1. Quality and scope of non-financial information to be disclosed
2. Standardisation
3. Application of the principle of materiality
4. Assurance
5. Digitisation
6. Structure and location of non-financial information
7. Personal scope (which companies should disclose)
8. Simplification and reduction of administrative burdens for companies

"Standardisation" contains questions about whether there should be common standards for EU companies, what the relation between financial information and non-financial information should be and which bodies/groups should be involved in setting these standards (if that should be the case).

The consultation document is available on the EC website (login required). Feedback is requested by May 14, 2020.

The IIRC has identified key themes around which it invites feedback, outlined in three topic papers on a) business model considerations, b) responsibility for an integrated report, and c) charting a path forward. The first two topic papers relate to the current <IR> Framework revision process. The third topic paper forges ahead with themes shaping the future of corporate reporting, including extended assurance and the role of technology. Feedback on this paper will inform the IIRC’s longer-term strategy.

Each topic paper separately invites market feedback via an online survey. Responses are requested by March 20, 2020. Please see the following additional information on the IIRC website:

• Press release
• Access to the three topic papers and surveys

Proposed amendments to the Framework will receive 90-day public exposure via a consultation draft, launching in May 2020. The revised Framework is due for release at the end of 2020.

The study assessed how 1000 European companies disclose sustainability and other non-financial information. Key findings of the study were:

1. Less than 22% of the companies surveyed report climate-related key performance indicators in summarised statements, the rest of them publish them scattered around in different locations or not at all;
2. only 20%-25% of companies describe risks specifically even though identifying them as relevant to the company in the first place;
3. the TCFD criteria are not applied;
4. outcomes are only reported in 4% of cases despite that fact that risks are identified and in some cases activities described;
5. supply chain transparency is low with supply chain transparency in the apparel sector being the highest but still not exceeding 14%;
6. only 6% of companies provide economic figures on sustainability activities;
7. disclosures are immaterial.

There is not a major difference between different European regions, with the exception that companies from former Eastern Europe lag behind.

Generally, disclosures are not specific enough to enable understanding of a company’s position and future developments. Reports focus on presenting general policies and commitments, but not concrete targets, outcomes of policies with respect to these targets, and specific information on risks and impacts.

The following additional information is available on the Alliance for Corporate Transparency website:

• Press release
• Final report
• Database with full analyses and findings
• Full summary on our global website

The topics covered during the meeting were the following (numbers in brackets are references to the corresponding paragraphs of the summary):

• Agenda Consultation (1–11): The ASAF discussed potential financial reporting priorities for the Board to discuss in the request for information. As high-level recommendations ASAF members stated that the Board should communicate its resource capacity in the RFI, that the Board should prioritise post-implementation reviews and the completion of existing major projects, and should also prioritise the effects of technology and digital reporting on standard-setting.
• Post-implementation review of IFRS 10, IFRS 11, and IFRS 12 (12–18): The ASAF was given an update on the feedback received from outreach in Phase 1 of the post-implementation review and commented on potential issues to be considered in the RFI.
• Accounting for intangible assets (19–28): The KASB gave a presentation on its research project on exploring a way to complement financial statements with a separate statement that identifies core intangibles and presents their value.
• IFRS 17 Insurance Contracts (29–35): The ASAF received an overview of the feedback on the exposure draft Amendments to IFRS 17 and was updated on the preliminary decisions of the Board at the November and December 2019 meetings.
• Agenda planning (36–38) — The ASAF discussed the proposed agenda for its April 2020 meeting.

Review the full summary on the IASB's website.

Starting in summer 2019 and increasing in scale and violence over the course of the year, protests have disrupted businesses in and around Hong Kong, an important financial hub and consumer market. Additionally, over the last six weeks, the global spread of the coronavirus has had a significant and far-reaching economic impact. Given these extraordinary circumstances, Compensation Advisory Partners (CAP) has outlined approaches that compensation committees can take to determine 2019 executive bonuses and plan for 2020.

Review the full blog on the NACD blog's website.

Following stakeholder consultation, the CSA has made substantive changes to the proposed rule that: 

• Limit the application to certain issuers;
• Exempt certain disclosures, financial measures and documents;
• Narrow the scope of what is considered a non-GAAP financial measure; and
• Reduce and simplify disclosures.

The proposed rule was originally published for comment on September 6, 2018 and would replace Staff Notice 52-306 (Revised) Non-GAAP Financial Measures. The CSA conducted 38 outreach sessions across seven Canadian cities and reviewed 42 comment letters from issuers, investors, accounting firms, standard setters, industry associations and law firms.

Proposed National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (the Proposed Instrument) and a revised version of proposed Companion Policy 52-112 Non-GAAP and other Financial Measures Disclosure (the Proposed Companion Policy) are available on CSA members’ websites. Comments should be submitted in writing by May 13, 2020.

Review the press release and notice on the CSA's website.

The webinar summarizes main proposals in the exposure draft, including subtotals in the statement of profit and loss, disaggregating information, and management performance measures.

Review the press release on the Board’s website.