Integrating Sustainability and Climate-Related Disclosures in Financial Reporting

Alfred Tang

Hatched by Alfred Tang

Aug 26, 2023

3 min read


Integrating Sustainability and Climate-Related Disclosures in Financial Reporting


As the world grapples with the urgent need to address climate change and promote sustainability, businesses are increasingly recognizing the importance of disclosing their environmental impact and incorporating sustainability-related information into their financial reporting. In this article, we will explore the core content responsibilities, skills, and competencies required for effective disclosure of sustainability-related financial information. We will also delve into the specific requirements outlined in the ISSB-2023-A IFRS Standards, focusing on both general requirements and climate-related disclosures.

Core Content Responsibilities:

The ISSB-2023-A IFRS Standards highlight the importance of disclosing sustainability-related financial information. This includes considering sustainability-related risks and opportunities, overseeing the setting of targets, managing and overseeing sustainability-related risks, and assessing the effects of these factors on the entity's business model, value chain, strategy, decision-making, and financial performance. These responsibilities require a deep understanding of sustainability issues, their impact on business operations, and the ability to effectively communicate this information to stakeholders.

Skills and Competencies:

To fulfill the core content responsibilities, individuals or bodies responsible for disclosing sustainability-related financial information need to possess certain skills and competencies. These include a strong grasp of sustainability reporting frameworks, such as the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB) standards. They should also have knowledge of relevant environmental regulations and the ability to analyze and interpret data related to greenhouse gas emissions and other sustainability metrics. Additionally, effective communication skills are crucial in conveying complex information to both internal and external stakeholders.

Incorporating Sustainability-Related Risks and Opportunities:

The ISSB-2023-A IFRS Standards - issb-2023-a-ifrs-s1-general-requirements-for-disclosure-of-sustainability-related-financial-information.pdf - emphasize the need to incorporate sustainability-related risks and opportunities into financial reporting. This means considering the potential impact of climate change, resource scarcity, and other environmental factors on the entity's business model and value chain. By understanding and disclosing these risks and opportunities, organizations can demonstrate their commitment to long-term sustainability and provide investors with a comprehensive view of their strategies.

Climate-Related Disclosures:

The ISSB-2023-A IFRS Standards - issb-2023-a-ifrs-s2-climate-related-disclosures.pdf - provide specific guidelines for disclosing climate-related information. This includes disclosing absolute gross greenhouse gas emissions, categorizing emissions according to the Greenhouse Gas Protocol, and disclosing industry-based metrics such as CO2 equivalent. Furthermore, entities are required to reassess climate-related risks and opportunities throughout their value chain in the event of significant changes or events. This ensures that disclosures remain accurate and up-to-date.

Connecting the Dots:

Sustainability-related financial information and climate-related disclosures are interconnected. While the general requirements for disclosure encompass a broader range of sustainability issues, climate-related disclosures specifically focus on the environmental impact of an entity's operations. By integrating both aspects, organizations can present a comprehensive picture of their sustainability efforts and their commitment to addressing climate change.

Actionable Advice:

  • 1. Develop a robust sustainability reporting framework: To effectively disclose sustainability-related financial information, organizations should adopt a recognized reporting framework such as GRI or SASB. This framework will provide a structured approach to identifying and reporting on relevant sustainability issues.
  • 2. Invest in data collection and analysis capabilities: Accurate and reliable data is crucial for meaningful sustainability disclosures. Organizations should invest in systems and processes that enable them to collect, analyze, and report on key sustainability metrics, including greenhouse gas emissions and resource consumption.
  • 3. Enhance stakeholder engagement: Engaging with stakeholders, including investors, customers, and employees, is essential for understanding their expectations and concerns regarding sustainability. By actively involving stakeholders in the disclosure process, organizations can gather valuable insights and ensure their disclosures meet stakeholder needs.


Incorporating sustainability-related financial information and climate-related disclosures into financial reporting is becoming increasingly vital for organizations. By fulfilling the core content responsibilities, developing the necessary skills and competencies, and adhering to the ISSB-2023-A IFRS Standards, businesses can effectively communicate their sustainability efforts and contribute to a more transparent and sustainable future. By following the actionable advice provided, organizations can drive meaningful change and build trust with stakeholders.

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