Sustainability Update for Financial Reporting – December 2023

Sustainability reporting has seen significant activity in the last few months with mandatory climate-reporting in Australia moving closer for a number of entities.

A snapshot of the latest activities has been provided below and we encourage clients to consider how these could affect their reporting:

  • ISSB’s New Sustainability Standards: The International Sustainability Standards Board (ISSB) has issued two sustainability standards, IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. These standards represent a major step forward in establishing globally consistent and comparable sustainability disclosure norms.  Each jurisdiction is responsible for determining the implementation of these standards.

 

  • Treasury’s Consultation on Climate-Related Disclosures: Federal Treasury is currently reviewing the response from a detailed consultation process to finalise the scope and timing for entities required to prepare climate-related disclosures. The latest proposals suggest a phased adoption approach: larger companies to start providing these disclosures in 2024/2025 (those meeting two out of three of more than 500 employees, consolidated gross assets >$1bn and consolidated revenue > $500m) and 2026/2027 (those meeting two out of three of more than 250 employees, consolidated gross assets >$500m and consolidated revenue > $200m), with all large proprietary companies providing the disclosures by 2027/2028.

 

  • AASB Exposure Draft on Climate-Related Disclosures: The Australian Accounting Standards Board (AASB) has released an exposure draft outlining the proposed content for climate-related disclosures. This is a significant step in aligning Australian reporting with global standards since the proposals are based on the requirements in the ISSB standards. The exposure draft is open for comments until 1 March 2024, and we strongly encourage all businesses to participate in this process. You can provide your feedback through the online survey, or by participating in a roundtable discussion. Refer to the AASB website for details.

It is important to note that the current focus in Australia is specifically on disclosures related to climate risks and opportunities, rather than on general sustainability disclosures. This targeted approach reflects the growing recognition of the financial impacts of climate change and the need for transparent reporting in this area.

As the landscape of sustainability reporting continues to evolve, staying ahead of these changes is vital. We are committed to keeping you informed and guiding you through not only the upcoming transitions in sustainability reporting standards, but across all aspects of ESG advisory.


For assistance with your financial and sustainability reporting requirements, contact your local Bentleys audit and assurance advisor.

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Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.

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