The IASB heard in recent years that climate-related risks are often perceived as remote, long-term risks and may not be appropriately considered in the financial statements and that users need better qualitative and quantitative information about the effect of climate-related risks on the carrying amounts of assets and liabilities reported in the financial statements.

The IASB reacted by publishing an article by Board member Nick Anderson in November 2019 discussing how existing requirements within IFRSs relate to climate change risks and other emerging risks and by releasing educational material on applying IFRSs to climate-related matters in November 2020 (updated and republished in July 2023).

In March 2023, the IASB added a project "Climate-related Risks in the Financial Statements" to its agenda with the first discussions of the project taking place this week. In September 2023, the IASB determined that possible actions resulting from the project would include development of educational materials, illustrative examples and targeted amendments to IFRS Accounting Standards to improve application of existing requirements. The staff will work closely with ISSB staff to facilitate connections in the Boards’ work. The IASB will also continue to monitor developments to determine whether to take further action.

Finally, the IASB has also decided to rename the project to "Climate-related and Other Uncertainties in the Financial Statements" to stress that the principles-based IASB standards apply to any risk an entity incurs.

Please click to access the press release on the IFRS Foundation website.