Reporting and Assurance of Material Climate Risks: Evidence from Australia

36 Pages Posted: 20 Dec 2022 Last revised: 15 Feb 2023

See all articles by Kevin Thai

Kevin Thai

RMIT University - School of AISSC

Yang Xu

University of Queensland - Business School

Kathleen Herbohn

University of Queensland - Business School

Date Written: December 1, 2022

Abstract

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

Thai, Kevin and Xu, Yang and Herbohn, Kath, Reporting and Assurance of Material Climate Risks: Evidence from Australia (December 1, 2022). AASB Research Centre Working Paper 6, Available at SSRN: https://ssrn.com/abstract=4307685

Kevin Thai (Contact Author)

RMIT University - School of AISSC ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Yang Xu

University of Queensland - Business School ( email )

Kath Herbohn

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
185
Abstract Views
544
Rank
291,220
PlumX Metrics