Reporting and Assurance of Material Climate Risks: Evidence from Australia
36 Pages Posted: 20 Dec 2022 Last revised: 15 Feb 2023
Date Written: December 1, 2022
We investigate the current state of climate-related risk disclosures and assurance in Australia to provide preliminary insights into the potential impact of the proposed IFRS S2 Climate- related disclosures on reporting entities. Our sample includes 108 ASX200 companies from 21 climate sensitive industries over the period 2017 to 2020. We construct a disclosure index based on the Sustainability Accounting Standards Board (SASB) framework as a materiality lens to assess the extent of material climate risk disclosures. We supplement this analysis with insights from semi-structured interviews. Our findings show an albeit small but increasing number of companies recognising the impact of climate risk with more entity-specific discussion in both quantitative and qualitative terms. On the contrary, we document limited evidence on assurance of climate risk disclosure and highlight a number of areas for improvement. Of particular interest of standard setters, the study also provides preliminary descriptive evidence on the reporting and assurance of Scope 3 GHG emissions.
Keywords: climate risk; assurance; materiality; SASB
JEL Classification: M41
Suggested Citation: Suggested Citation