ADAPTATION Mandatory reporting

What will reporting look like?

Reporting is required against climate standards issued by the External Reporting Board (XRB). These climate standards are based on the recommendations of the Task Force on Climate-related Financial Disclosures after a public consultation process.

The climate-related disclosure framework is structured around four thematic areas. These are outlined in the table to the right.

Climate reporting entities will be required to prepare an annual climate change statement. This can either be included in its annual report or on its website. It is not a comply or explain regime – disclosure is required.

Greenhouse gas (GHG) emission disclosure included in climate statements needs to be subject to external assurance. However, there is no external assurance requirement for the first climate statements. Climate reporting entities will be required to have the greenhouse gas disclosure in climate statements be the subject of external assurance from the second climate statement (i.e., for the accounting period starting in 2024).

Climate change statements must be supported by appropriate records.

Topic Overview

Governance Strategy

Enable readers to understand both the role an entity’s governance body (e.g., a board or an investment committee) plays in overseeing climate-related risks and climate-related opportunities, and the role management plays in assessing and managing those climate-related risks and opportunities

Key Focus

The directors’ role in providing oversight of climate-related risks and opportunities

Risk Management

Enable readers to understand how climate change is currently impacting an entity and how it may do so in the future

Identifying climate-related risks and opportunities (both transition risks like policy, reputational and market shifts, and physical risks like extreme weather events)

Enable readers to understand how an entity’s climate-related risks are identified, assessed and managed, and how those processes are integrated in existing risk management processes

How identified risks (transition and physical) will impact the entity’s business model, strategy and financial planning

Metrics And Targets

Enable readers to understand transition and physical risks

Entities are required to disclose scope 1, 2 and 3 greenhouse gas emissions.

Legislation requires these to be assured