Commentary: Climate-Related Risks Disclosures in the Notes to Financial Statements: Descriptive Evidence from Australia

Abstract

This paper aims to provide background information about the International Accounting Standards Board's Climate-Related Risks in the Financial Statements project. Further, we provide some observations of related disclosures in the notes to the 2022 financial statements of the top 75 Australian Securities Exchange-listed entities. Overall, we find that there has been improvement in the disclosures and considerations of climate-related risks in the financial statements in recent years. However, the disclosures appear to be generic, which may not meet the needs of financial statement users. We suggest that further research is needed to provide evidence about how such risks are considered and disclosed in the financial statements and whether such information meets user needs. Evidence will help standard setters to consider appropriate action, such as providing educational material or amending the Accounting Standards, to enhance the quality of financial reporting.