KPMG, a leading global professional services firm, is pleased to announce the launch of a new digital portal: Clear on Climate Reporting. This tool will help companies communicate the financial implications of climate-related risks and business opportunities associated with these risks to investors and authorities.
Accordingly, KPMG says that the new hub has been under development due to increased scrutiny of financial reporting as a result of climate change by broader stakeholders, particularly as most companies now face growing risks associated with the physical impacts of climate change and the low-carbon transition. The company said that while companies should consider whether these climate-related matters are relevant for their financial statements, “there isn’t one standard that covers it all, and there’s a lot of ground to cover to get the accounting correct.”
Brian O’Donovan, Global IFRS and Corporate Reporting Leader at KPMG International, commented:
“In essence, firms should disclose to investors how relevant climate-related activities are impacting their finances, and if they do not feel there is any such financial impact, then explain why this is so. The investors want to see an integrated picture of performance that includes the financial consequences of sustainability objectives and initiatives.”.
In its announcement, KPMG said that the new hub would feature an initial series of resources made available to address the latest, most relevant reporting issues on climate for companies. This includes FAQs to help identify potential financial statement impacts for businesses and podcasts and videos that consider the issues more deeply, including by sector. There are also plans to add to the hub more resources later, including a new section on emissions.
These will involve the recognition of liabilities associated with net-zero commitments, the accounting for emissions reduction schemes, the measurement of ESG in executive remuneration packages, the considerations for companies purchasing carbon credits, and the accounting for various types of government assistance, among many others.
Larry Bradley, Global Head of Audit, KPMG International, said:
“What’s disclosed at the front of the annual report isn’t necessarily reflected in the financial statements in the way users might expect. I think that’s often the case for climate. Companies are required to apply IF RS Accounting Standards, but companies also link financial and non-financial information.”.