An AICPA & CIMA series of educational briefs focused on sustainability and business is now available in full.
AICPA & CIMA, together as the Association of International Certified Professional Accountants, launched Accounting for Climate Resilience, the final brief in a four-part series. Written by Martin Farrar, Ph.D., associate technical director at AICPA & CIMA, the brief is designed to help finance professionals build their sustainability literacy so they can lead and support the journeys of their organisations, firms, and clients.
“Finance professionals are at the heart of business and therefore are well-placed to help create resilient business models and implement strategies for organisational sustainability in a changing world,” Farrar said in a news release. “They have connections within the business and can join the dots with stakeholders outside the business to start conversations about what resilience looks like in relation to the risks posed by the climate emergency.”
The series is part of AICPA & CIMA’s continued commitment to provide all accounting and finance professionals with the resources, tools, and skills they need to support the transition to more responsible business practices.
The “Accounting for” series aims to help organisations consider sustainability issues and support their transition to more responsible business practices, placing long-term value creation at the heart of corporate activities and reporting. Previously released briefs in the series are:
“With their skills and knowledge, finance professionals can provide insights into organisational governance, strategy, risk management, and performance to support sustainable decision-making built on sound business analysis and assurance of both financial and nonfinancial information, including sustainability-related data,” Jeremy Osborn, Ph.D., FCMA, CGMA, global head of ESG at AICPA & CIMA, said in a news release. “They are ideally placed to support climate scenario development and build this into organisational adaptation plans.”
FRC reviews climate-related disclosures
The UK Financial Reporting Council (FRC) published a thematic review to assess “the quality and maturity of climate-related metrics and targets disclosures”, a news release said. The review found an incremental improvement in the quality of companies’ disclosure of net zero commitments and interim emissions targets.
The review also found that financial statements across the board still need improvement, the FRC said. According to the release, concrete actions and milestones to meet targets were sometimes unclear, and comparability of metrics between companies remains challenging. The review further noted that “boilerplate language on climate being ‘considered’ provides little insight on impacts”.
The publication details key expectations from the regulator for companies going forward.
IASB moves towards finalising standards
The IASB has concluded its decision-making on two projects—its final steps before drafting and balloting two new IFRS accounting standards, a news release said. They aim to “clarify, and enhance information companies provide about their financial performance, [and] simplify the financial statements prepared by subsidiaries of listed groups”, the release continued.
“The first new accounting standard will result in companies reporting more consistently and transparently on their financial performance, making it easier for investors to compare companies,” the release said. “It will help to build trust between companies and investors and ultimately ease the flow of capital.” It will supersede IAS 1, Presentation of Financial Statements.
“The second…will reduce disclosure requirements for subsidiaries that are not traded on a public market, or [hold] assets entrusted to them by their customers,” the release said. “[It] will enable those subsidiaries to prepare full IFRS financial statements locally by using the information reported to their parent company but with reduced disclosures.”
The board has decided that the effective date of both standards will be for annual reporting periods beginning on or after 1 January 2027 to give companies sufficient time to implement the new requirements, the release said, with earlier adoption permitted. The IASB expects to issue the standards in the first half of 2024.
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