Climate change and environmental policy

Content Summary

Information about the impacts of climate change should now be considered as key to a reasonable investor’s decision making, and therefore as material in a disclosure context.

Climate-related financial risks and opportunities broadly include physical impacts (both immediate and gradual onset), economic transition impacts (including policy and regulatory developments, technology and stakeholder interests) and liability exposures.

Our policy statement: climate change

CPA Australia recognises the overwhelming scientific consensus of the growing urgency of international and national actions to achieving a net-zero carbon emissions position by 2050. This policy statement outlines our position on climate change, and the role accountants can play in helping to combat the effect of climate change.

The global accounting professions's call to action on climate change

CPA Australia has joined many of the world’s largest professional accounting organisations in committing to action in response to climate change. The 14 organisations represent 2.5 million accountants globally. The call to action recognises the crucial role of the accounting profession in addressing climate change. Professional accountants are represented in every sector across the economy and are uniquely positioned to enact meaningful and positive change through a collective effort.

Reports, research and resources

The following reports, research papers and resources may inform and help our members and accounting professionals contribute to the economic and business response to climate change.

CPA Australia publications

Climate change and professional liability risk for auditors

This analysis outlines the comparative legal obligations and potential sources of professional liability for Australian auditors, based on the UK non-profit environmental law organisation, ClientEarth’s publication Risky business – Climate change and professional liability risk for auditors

The four short papers examine the various standards and rules applicable to UK auditors’ duties relating to annual financial accounts, focusing where those corporate disclosures might reasonably be expected to contain climate risk-related information, and how these might translate to Australian circumstances.

Australian policy and impact

Australia’s international climate change commitments: Associated accounting assumptions and auditing of climate risk disclosuresPDF · 1.4 MB

CPA Australia commissioned research from the University of Melbourne, The Commonwealth Climate and Law Initiative and MinterEllison to explore the impacts of Australia’s international climate commitments on the accountancy profession.

Background factsheetPDF · 54.6 KB
Community factsheetPDF · 470.6 KB
Financial Stability Board’s Task Force on Climate-related Disclosures: Implications for Australian business and corporate reportingPDF · 379.9 KB

The Task Force on Climate-related Financial Disclosures (TCFD) was established in 2015 to develop a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders and insurance underwriters about their climate-related financial risks. This paper from Dr John Purcell FCPA explores the TFCD’s recommendations and their implications for corporate reporting.

Carbon risk: a contemporary business challenge and the role of bank monitoringPDF · 539.8 KB

Since 2007, Australia has had a comprehensive statutory-based mechanism for ensuring the collection and reporting of energy and emissions information for large emitters of greenhouse gases – the National Greenhouse and Energy Reporting Systems (NGERS). Reporting under NGERS is not tied to mainstream disclosures to financial markets. This study from researchers at the University of Queensland explores one of the processes and practices that has emerged to fill this gap –  – bank loan and renewal announcements premised on access to risk-related information.

Carbon reporting: regulatory and voluntary disclosuresPDF · 406.6 KB

This 2016 report by Cornelia Beck, Geoff Frost, Stewart Jones and Zornzita Baker is a longitudinal study of ASX-listed companies drawn from the national greenhouse and energy reporting act register.

Accounting and the law

Keynote address: Climate change risk disclosure – where law and accounting might converge or continue to divergePDF · 202.6 KB

CPA Australia presented at the Commonwealth Climate Law Initiative (CCLI) International Legal Symposium held 29 August 2016 in Melbourne. The keynote address explored the differing legal and accounting explanations for the emergence of non-financial voluntary disclosures and argued that aligning law and accounting around climate risk disclosure could both build disclosure utility and improve related governance potentially negating litigation risk.