KPMG has recently launched its Clear On Climate Reporting Hub to provide insights and guidance to help organisations and their stakeholders understand how to be clear on climate in corporate reporting.

The organisation says that climate change is driving broader stakeholder scrutiny of financial reporting, with regulators, investors and the public focussing on how companies report on climate-related matters, such as net-zero commitments. And they are demanding clarity about climate.

The new hub covers key reporting issues - through FAQs, podcasts and videos - that will be helpful to companies when considering how to explain to investors and stakeholders the financial implications of climate-related matters. KPMG says that the resources will constantly grow and be regularly refreshed, for example, a whole new emissions section will be added soon. 

Most, if not all, companies are facing risks arising from the physical effects of climate change and the transition to a lower-carbon economy. KPMG says they should consider whether these matters are material to the financial statements and ensure users can understand the impact of climate. There is no single standard that addresses everything and there are a lot of bases to cover to get the accounting right. The essential question for companies is: would an investor make a different decision if a piece of information were included?

Ultimately, investors and regulators want to see clarity and connectivity between a company’s financial and sustainability performance. A lot is happening in the corporate reporting space and companies are at varying stages in their sustainability reporting journey. But one of the first jobs is for companies to address climate in their financial statements today and ensure they’re complying with the relevant requirements and are clear about the policies applied and judgements made. They should also join the dots to connect all climate-related information in their corporate reporting.

“Essentially, companies need to tell investors what the financial implications of their climate-related plans are; and if they believe there’s no financial impact, tell investors why,” explained Brian O’Donovan, Global IFRS and Corporate Reporting Leader, KPMG International. “Investors are looking for a connected picture of performance, showing the financial implications of sustainability plans and actions.”

Click here to access The Clear on Climate Reporting Hub.