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Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

Your partners for Business Service and Advisory, Taxation, Audit, Fraud and Risk.

Whatever your business, industry or family office, from local or international institutions we bring extensive expertise.

We're one team with a purpose and passion for what we do. Learn about our culture and career opportunities available to you.

Uncovering insights, trends and inspiration to help business grow in an ever-changing world.

We are always looking for ways to engage and give back to our community.

Telephone: +612 9283 1666
Email: admin@esvgroup.com.au

Level 13, 68 York Street,
Sydney NSW 2000

Why us

Our purpose is to help you on your journey as you grow. Learn more about our history, partners and purpose.

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Your partners for Business Service and Advisory, Taxation, Audit, Fraud and Risk.

Who do we help

Whatever your business, industry or family office, from local or international institutions we bring extensive expertise.

Work with us

We're one team with a purpose and passion for what we do. Learn about our culture and career opportunities available to you.

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Uncovering insights, trends and inspiration to help business grow in an ever-changing world.

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We are always looking for ways to engage and give back to our community.

Contact us

Telephone: +612 9283 1666
Email: admin@esvgroup.com.au

Level 13, 68 York Street,
Sydney NSW 2000

13 December 2022

by Brooke Steedman

Accountants are also talking climate change

In response to the growing global demand for more consistent and comparable disclosures of sustainability-related financial information, the International Sustainability Standards Board (ISSB) was established to develop a comprehensive global baseline of sustainability disclosures for capital markets.

In March 2022, ISSB released the first of two proposed standards. One sets out general sustainability-related disclosures, and the other sets out climate-related disclosure requirements.

 

What are the new requirements?

The proposed standards have specified how and what information is required to be disclosed in the financial statements for reporting entities. The disclosures have been split into four sections. Below is a summary of the disclosures for the general sustainability-related disclosures – in our next InDepth newsletter we will provide an overview of the climate-related disclosure requirements.

Section What to disclose
Governance The governance processes, controls and procedures the entity uses to monitor and manage sustainability-related risks and opportunities
Strategy The approach for addressing sustainability-related risks and opportunities that could affect the entity’s business model and strategy over the short, medium and long term
Risk management The processes the entity used to identify, assess and manage sustainability-related risks
Metrics and targets Information used to assess, manage and monitor the entity’s performance in relation to sustainability-related risks and opportunities over time

The proposed standard requires an entity to disclose material information about all the significant sustainability-related risks and opportunities to which it is exposed. Importantly, the proposed standard specifies that an entity will include a complete, neutral and accurate depiction of its sustainability-related financial information.

 

When will this be required?

The consultation period for the exposure drafts is now finished, and the ISSB are collating feedback, and expect to release these two standards before the end of the year. We expect the standards will apply to all reporting entities, or entities that prepare general purpose financials reports in accordance with International Financial Reporting Standards (IFRS) and other Generally Accepted Accounting Principles (GAAP).

For Australia, the Australian Accounting Standards Board (AASB) intends to use the IFRS Sustainability Standard as a baseline, with modifications for Australian stakeholders. We expect (and hope!) that the AASB will release their version of the Sustainability Standard in the New Year.  At this stage we don’t expect that it will be a requirement for disclosure in financial statements, but rather be included in the broader ‘general purpose financial reporting’.

 

Why are we interested?

Last month our Partners Kurt Baker and Geoff Tierney attended a TAG Alliances (one of the world’s largest multidisciplinary alliances of independent professional services firms) Conference in Dublin.  Environmental, Social and Governance (ESG) issues were a major theme. Accountants around the world are talking about this and the impact these changes will have on sustainability-related disclosures and the way we (all) do business in the future.

We will continue to keep our valued clients updated on changes to sustainability reporting. We have developed expertise in this area – if you have any questions or need assistance, please reach out to your ESV Engagement Partner.