The Intersection of Financial Reporting and Climate-related Disclosures

Alfred Tang

Alfred Tang

Nov 19, 20233 min read


The Intersection of Financial Reporting and Climate-related Disclosures


The world is increasingly recognizing the urgent need to address climate change and its impact on the environment. As a result, regulatory bodies and standard-setting organizations are taking steps to incorporate climate-related disclosures into financial reporting frameworks. In this article, we will explore the common points between two important documents - the "consultation-paper-recommendations-by-srac.pdf" and "ISSB-2023-A – Issued IFRS Standards - issb-2023-a-ifrs-s2-climate-related-disclosures.pdf". We will also provide actionable advice for entities looking to navigate this evolving landscape.

1. Consolidated Accounting Group and Reporting Scope:

The "consultation-paper-recommendations-by-srac.pdf" emphasizes the need to report financial information for a consolidated accounting group separately from associates, joint ventures, unconsolidated subsidiaries, or affiliates not included in the group. This allows for a clearer understanding of the financial performance and position of the group as a whole. Similarly, the "ISSB-2023-A" document highlights the importance of reassessing the scope of climate-related risks and opportunities throughout an entity's value chain. This reassessment should occur in response to significant events or changes in circumstances. By aligning financial reporting with climate-related disclosures, entities can gain a holistic view of their impact on the environment and make informed decisions.

2. Greenhouse Gas Emissions and Disclosures:

Both documents emphasize the disclosure of greenhouse gas emissions as a crucial aspect of climate-related reporting. The "ISSB-2023-A" document suggests that entities should disclose their absolute gross greenhouse gas emissions using the Greenhouse Gas Protocol categories. This industry-based metric, expressed as CO2 equivalent, provides a standardized framework for measuring emissions. Similarly, the "consultation-paper-recommendations-by-srac.pdf" highlights the importance of including data on greenhouse gas emissions from the parent company, its consolidated subsidiaries, and disaggregated associates, joint ventures, and unconsolidated subsidiaries. By incorporating these disclosures, entities can provide stakeholders with a transparent view of their environmental impact and contribute to the global sustainability agenda.

3. Integration of Financial and Climate-related Reporting:

One unique insight that emerges from the intersection of these documents is the need for integration between financial reporting and climate-related disclosures. The "consultation-paper-recommendations-by-srac.pdf" proposes a separate implementation timeline for financial sector entities, emphasizing the distinct nature of their reporting requirements. On the other hand, the "ISSB-2023-A" document highlights the need for ongoing reassessment of climate-related risks and opportunities throughout an entity's value chain. By integrating financial and climate-related reporting, entities can effectively communicate their sustainability initiatives, assess the financial implications of climate-related risks, and drive meaningful change.

Actionable Advice:

  • 1. Embrace Transparency: Entities should proactively embrace transparency by disclosing their greenhouse gas emissions and climate-related risks. This can be done by following the Greenhouse Gas Protocol categories and reassessing risks and opportunities throughout the value chain.
  • 2. Implement Robust Reporting Systems: To effectively integrate financial reporting with climate-related disclosures, entities should invest in robust reporting systems that capture and analyze relevant data. This will enable accurate measurement of emissions and identification of climate-related risks and opportunities.
  • 3. Seek Expert Guidance: Given the evolving nature of climate-related reporting requirements, entities should seek expert guidance from professionals well-versed in financial reporting and sustainability. Engaging with consultants or advisors can help entities navigate complex regulations and ensure compliance with emerging standards.


As the world grapples with the challenges of climate change, financial reporting frameworks are evolving to incorporate climate-related disclosures. The intersection of the "consultation-paper-recommendations-by-srac.pdf" and "ISSB-2023-A" documents highlights the importance of consolidated accounting group reporting, greenhouse gas emissions disclosures, and integration between financial and climate-related reporting. By embracing transparency, implementing robust reporting systems, and seeking expert guidance, entities can navigate this evolving landscape and contribute to a more sustainable future.

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