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Climate-related and other emerging risks disclosures: assessing financial statement materiality using AASB/IASB Practice Statement 2

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Summary

This publication argues that climate-related risks and other emerging risks are currently predominantly discussed outside the financial statements, if at all, while qualitative external factors such as the industry in which the entity operates, and investor expectations may make such risks ‘material’ and warrant disclosures when preparing financial statements, regardless of their numerical impact. It also notes investor statements on the importance of climate-related risks to their decision making so that entities can no longer treat climate-related risks as merely a matter of corporate social responsibility and should consider them also in the context of their financial statement.

Thumbnail image for This publication argues that climate-related risks and other emerging risks are currently predominantly discussed outside the financial statements, if at all, while qualitative external factors such as the industry in which the entity operates, and investor expectations may make such risks ‘material’ and warrant disclosures when preparing financial statements, regardless of their numerical impact. It also notes investor statements on the importance of climate-related risks to their decision making so that entities can no longer treat climate-related risks as merely a matter of corporate social responsibility and should consider them also in the context of their financial statement.
Issuer

Australia

Year

2019

Region

Oceania

Policy Type

Disclosure

Geographical scope

National

Mandatory or voluntary

Voluntary


Main industries targeted
  • Finance & Insurance
  • Professional, Scientific, & Technical Services
  • Construction
  • Public administration
Restrictiveness

Very Low

Sustainable Development Goals (SDGs)
  • SDG 2: Zero Hunger
  • SDG 8: Decent Work and Economic Growth
  • SDG 10: Reduced Inequality

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