Our resource centre provides an overview of the Australian regulatory landscape highlighting the increasing focus of climate change and sustainability within financial reporting and helps you consider the reporting impacts. Discover the latest developments in sustainability reporting both globally and locally.
Climate risk impact assessment
Use our 10 questions for audit committees as a starting point for your impact assessment relating to the financial statements.
1. Has your company made a net-zero commitment?
2. Does your company have polluting assets?
3. Is your company exposed to carbon-related regulation?
4. What about your inventory and production costs?
5. Does your company take part in an emissions scheme?
6. Does your company borrow funds?
7. Is your company a provider of finance?
8. What about your staff benefits?
9. What about your cash flow forecasts?
10. What about your disclosures?
How might climate risks impact financial statements?
Ten questions to start your climate-risk assessment.
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Climate change reporting insights
An overview of the Australian regulatory landscape and financial reporting trends for climate change and decarbonisation.
Our publications help organisations communicate the impact of climate in Annual reports and financial statements.
We highlight regulator and government activities on sustainability reporting and their implications on current and future reporting practices.
Regulator and government activities on sustainability reporting and their implications.
Climate reporting and related publications
- Climate-related financial disclosure: KPMG submission – 2023
- Sustainability Reporting Survey – 2022
- ASX200 corporate reporting trends – 2022
- Bank’s climate-related disclosures – 2022
- Sustainability linked financing – accounting considerations (22RU-10)
- Sustainable energy: Power purchase arrangements (22RU-08)
- Climate-related risks in financial statements (21RU-002)
- Climate change in the annual report – Webinar (October 2021)
- Climate disclosures within the Annual Report: Australian focus
- Towards Net Zero: International and Australian climate risk reporting
Climate change reporting FAQs
Frequently asked questions to help identify and address climate change impacts on your financial statements.
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Capital & Finance
- How do you account for different forms of government assistance?
- Do green bonds contain embedded derivatives?
- Do you have a lease of green technology?
- What are the potential impacts of leasing polluting assets?
Sustainability reporting developments
Understand the rapid and converging developments in sustainability reporting.
New International Sustainability Standards Board
The IFRS Foundation is aiming to put sustainability reporting on the same footing as financial reporting by establishing a sister body to the International Accounting Standards Board. The ISSB will address the demand for global sustainability disclosure standards. The goal is to drive globally consistent, comparable and reliable sustainability reporting using a building blocks approach. This approach will allow national and regional jurisdictions to build on that global baseline to set supplemental standards that serve their specific jurisdictional needs. Read more >
Get ready for global sustainability reporting standards
Sustainability reporting continues to develop at a fast pace across the globe. Three sets of proposed standards have been exposed for comment: from the ISSB Board, the US Securities Exchange Commission (SEC) and the European Financial Reporting Advisory Group (EFRAG).
The ISSB released two Exposure Drafts on climate-related disclosures and general requirements for disclosures – that provide proposals to create a global baseline for investor-focused sustainability reporting. Standards are expected to be finalised in June 2023.
Read more about the proposal >
Our Comparing sustainability reporting proposals guide (PDF 1022KB) provides further insight on some of the practical challenges you may encounter as you prepare for the new sustainability reporting standards.
Sustainability-related disclosures – heightened expectations for current reporting periods
Recent regulator and government activities in Australia in late 2022/early 2023 reinforced the increasing focus and heightened expectations surrounding sustainability reporting, particularly climate. Exposed entities need to act now rather than later in considering their reporting and communications.
Read more in Reporting Update 23RU-01 >
Further, the TCFD recommendations are supported by all Australian standard-setters and regulators and are currently considered to be the basis for best practice climate-related disclosures in Annual Reports.
Read more in Reporting Update 22-RU-03 >
Since releasing our Reporting Update in March 2022, the AASB has formally endorsed its support of the voluntary adoption of the recommendations made by the TCFD. The statement is a means of providing direction for stakeholders prior to mandatory requirements being issued in Australia.
Mandatory climate related-financial reporting could be required in Australia for 2024/2025 financial years
In December 2022, the Australian government released a consultation paper that sought initial views on proposals to introduce standardised, internationally aligned legislative requirements for disclosure of climate-related financial risks and opportunities from financial years 2024-25 in Australia.
Some key areas consulted on include:
- Scope of entities captured by climate-related reporting requirements
- Timing of mandatory reporting and assurance of disclosures
- Alignment to ISSB climate related risk standard
- Materiality considerations
Views were also sought on necessary changes to ensure Australia’s financial reporting bodies are appropriately positioned for the expansion of international standard setting priorities on climate and sustainability reporting.
This consultation will be used to inform specific design proposals for further consultation in 2023. At that time, views will be sought on more detailed proposals for the new reporting requirements, their implementation and sequencing.
Read more in Reporting Update 23RU-01 >
Read our response to this Treasury consultation >
In late November 2022, the Australian government consulted on amending legislation to empower the AASB to deliver sustainability standards. The amendments confirm the AASB, AUASB and FRC as the entities responsible for:
- developing sustainability standards
- developing auditing and assurance standards for sustainability purposes
- providing strategic oversight, respectively.
The sustainability standards made by the AASB will not be enforceable until further legislative changes are made to apply the standards (refer above December 2022 consultation).
Read our response to this Treasury consultation (PDF 153KB) >
The AASB is actively considering the release of the ISSB standards in Australia, and sought feedback on the ISSB Exposure Drafts to inform the AASB as to the appropriateness of and support for its proposed approach to sustainability-related financial reporting in Australia.
Read our response to the AASB's consultation (PDF 236KB) >
How KPMG can help
KPMG Australia's services related to sustainability and climate change reporting in financial statements.
Your climate change-related Annual Report disclosures under TCFD recommendations
Climate Change & Sustainability >
Reporting climate change impacts in financial statements – how your climate change response impacts recognition, measurement and disclosures
Sustainability Strategy & Reporting >
Providing assurance over your climate change related disclosures throughout your Annual Report
Your sustainability and corporate reporting more broadly
Sustainability Strategy & Reporting >
Meet the team
Get in touch below.
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