AASB-AUASB Joint Research Report on Climate-Related Disclosures and Assurance in the Annual Reports of ASX Listed Companies

Monday, December 19, 2022

The AASB-AUASB published a joint research report (authored by Jean You and Professor Roger Simnett) that identifies climate-related disclosures and associated assurance practices in Annual Reports of ASX-listed entities.

The report provides some key considerations, such as:

• There is demand for a comparable, internationally-aligned approach to deliver a baseline of more consistent sustainability, including climate-related, disclosures.
• Entities are rapidly increasingly recognising climate impacts directly in their Annual Report/Corporate Governance Statement.
• Climate-sensitive industries are more likely to voluntarily disclose climate-related information with extant reporting standards and/or guidelines.
• Most climate-related disclosures in the Annual Report were outside the financial reports and thus not subject to audit.
• Disclosure of climate-related information in financial reports and remuneration reports is increasing, which impacts the financial report audits.
• A rising number of key audit matters (KAMs) are including climate-related impacts, as well as a case where the auditor reported the impact of climate-related reporting on their audit planning in their audit report.
• Although most current assurance engagements provide limited assurance only for climate-related information, there is a trend occurring in the Australian market to assurance reports containing both reasonable and limited assurance levels.