KPMG has released the report – Climate Disclosures within the Annual Report that discusses how emerging impacts of climate change are leading investors to demand greater transparency in relation to a corporation’s exposure to climate risk.
These requirements go well beyond corporate sustainability reporting and require companies to consider the transitional and physical impacts of climate change including increased cost of reporting and regulation, the cost of damaged or stranded assets, and also failure to capitalise on emerging market trends, such as renewable energy.
Major institutional investors and activist shareholders are increasingly demanding that companies disclose how they are addressing climate risks, and the impact of climate change on earnings and shareholder returns.
Regulatory bodies, such as ASIC and APRA, are becoming increasingly prescriptive in relation to disclosure requirements.
Recent shareholder meetings have been dominated by activist shareholder questioning climate-related action.
The KPMG report outlines the various disclosure requirements and recommendations, and how companies can communicate the impacts of climate on their business models, strategy, financial performance; and future prospects in their Annual Reports and Financial Statements.
Australian requirements are mapped to the Taskforce on Climate-related Financial Disclosure (TCFD) which is increasingly being adopted as a template for addressing climate risk, by investors, NGOs, and corporations wishing to avoid being seen as climate “laggards”.
For further information and/or guidance, please contact Steve Tonner, Senior Environmental Specialist, KPMG at email stonner@kpmg,com.au
