Climate change and environmental policy

Content Summary

Climate change has evolved from an ethical  issue to one that has material impacts on financial performance, position and prospects. Information about the impacts of climate change should 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.

Climate change and financial reporting

Our climate change policy statement

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.

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

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 factsheet
PDF · 54.6 KB
Community factsheet
PDF · 470.6 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.

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.

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

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.