That’s one of the key takeouts from experts at FTI Consulting who spoke at FINSIA’s Enter the Conversation event and who are sharing their need-to-know checklist for Executives and Board directors.
“The perception held by some of ESG as a mere appeasement for socially conscious investors is about to shift with the upcoming introduction of the ISSB Standards,” says the report co-authored by FTI’s Renee Law, Izabela Szewczul and Elodie Castagna who remind us that this is very much not the case.
“Be aware, this is more than just a reporting framework; it is also a rewiring of how company value is determined, articulated and how performance is measured.
“Companies will need to assess information to disclose that can reasonably influence decisions by key stakeholders such as investors, lenders and creditors.
“Once adopted internationally and adapted for the Australian context, which in our market will extend to climate-related financial disclosures in the short-termbusinesses will be expected to align financial reporting with sustainability reporting.
“As a result, there may be a requirement for additional disclosures in an entity's financial statements.
“This means companies must be ready to share a much more comprehensive range of information than before with investors, lenders and other financial stakeholders.”
The report entitled How Australian Companies Can Prepare for the ISSB Standards - being shared with FINSIA members – also includes a timeline of how Treasury is rolling out Australia’s climate-related financial disclosure requirements, with the standards being designed by the Australian Accounting Standards Board.
In the paper, FTI poses seven questions you will need answers to which include: “Is training required to bring your Executives and Board up to speed? How are you planning to capture and disclose Greenhouse Gas emissions? And How does your corporate strategy align with your sustainability agenda?”
Read the full report here
