KPMG Unveils Reporting Hub to Support Businesses Struggling to Ensure They are ‘Clear on Climate’
KPMG has launched a new ‘Clear on Climate’ reporting hub, which will provide insight and guidance to organisations looking to better understand how to best report on climate-related matters.
As the general public becomes increasingly interested in how companies report on net-zero commitments and climate-related issues caused by climate change, regulator and stakeholder scrutiny of financial reports is also on the rise.
KPMG explained it hopes to tackle key reporting issues through FAQs, podcasts and videos, all of which are available on its new climate reporting hub. It says it should become the first place companies go to consider how to clearly explain the financial implications of climate-related matters to investors and stakeholders.
The global accounting firm also says it plans to constantly grow the resources available on the hub, with a new emissions section imminent.
Larry Bradley, global head of audit at KPMG International, explained: “What’s described in the front of the annual report won’t always be mirrored in the financial statements in the way users expect. This is often true for climate. It is important that companies both comply with the IFRS Accounting Standards and connect the dots between financial and non-financial information.”
As a greater number of physical effects caused by climate change arise, and as the transition to a lower carbon economy continues across the globe, many businesses should consider whether these matters are material to the financial statements and ensure users can understand the impact of climate, says KPMG.
Enhancing climate clarity and connectivity
“Essentially, companies need to tell investors what the financial implications of their climate-related plans are; and if they believe there’s no financial impact, tell investors why,” explains Brian O’Donovan, global IFRS and corporate reporting leader at KPMG International. “Investors are looking for a connected picture of performance, showing the financial implications of sustainability plans and actions.”
With investors and regulators wanting to see greater clarity and connectivity between each company’s financial and sustainability performance, companies must ensure they address climate in their financial statements.
Firms must also ensure they are complying with the relevant requirements and are clear about the policies applied and judgements made. They should also join the dots to connect all climate-related information in their corporate reporting.
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”