New guidance to help professional accountants and finance professionals deliver robust greenhouse gas (GHG) reporting has been released today by the International Federation of Accountants (IFAC) and We Mean Business Coalition (WMBC), in partnership with Accounting for Sustainability (A4S), Global Accounting Alliance (GAA) and World Business Council for Sustainable Development (WBCSD).
The guidance is a response to rapidly escalating impacts of climate change and emerging mandatory requirements that companies disclose robust information about their GHG emissions and climate risks and opportunities to help investors allocate capital to the ‘greenest’ companies.
It aims to guide CFOs, accountants and finance professionals to build on existing systems and processes in order to undertake or enhance cost-effective and investor-grade GHG reporting.
The first part of the guidance, 8 Steps to Enhance GHG Reporting: A Roadmap for Accounting and Finance Professionals, provides finance and accounting professionals with a roadmap to engage with others across their business to prepare for GHG emissions reporting requirements aligned to financial reporting processes. While the second, GHG Reporting Building Blocks for Accountants, equips accountants with the technical guidance necessary to collect and enhance the quality of data related to all scopes of GHG emissions at individual entity and group levels.
The publications have been released in preparation for the upcoming international and jurisdictional standards and regulations that will make it mandatory for companies to advance GHG reporting to new levels and provide investors with decision-useful information related to climate risks and opportunities. These include the International Sustainability Standards Board (ISSB) General Sustainability-related Disclosures (IFRS S1) and Climate-related Disclosures (IFRS S2), the European Financial Reporting Advisory Group's (EFRAG) European Sustainability Reporting Standards (ESRS) and proposed rules for climate change disclosures by the U.S. Securities and Exchange Commission (SEC).
"With their ideal positioning to champion an integrated mindset by connecting financial and emissions data and processes and analyses, professional accountants and finance professionals play a crucial role in providing decision-useful and trusted GHG reporting to management and capital markets,” said Kevin Dancey, IFAC CEO. “The release of this guidance is a significant step towards enabling these professionals to prepare for the increasing demand for investor-grade climate reporting by aligning GHG emissions accounting with financial accounting."
Maria Mendiluce, CEO, We Mean Business Coalition said: “This guidance demonstrates that robust GHG reporting is not an onerous task, but rather one that can be incorporated, at minimal cost, into existing systems and processes. By working together, finance and sustainability professionals can report in the most efficient way and, in doing so, attract greater investment from those capital providers looking for the most sustainable companies.”
About IFAC
IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 180 members and associates in 135 countries and jurisdictions, representing more than 3 million accountants in public practice, education, government service, industry, and commerce.
About WMBC
We Mean Business Coalition (WMBC) is a global nonprofit coalition working with the world’s most influential businesses to take action on climate change. Together we catalyze business leadership to drive policy ambition and accelerate the transition to a low-carbon economy. Our mission is to ensure that the world economy is on track to avoid dangerous climate change by 2020 while delivering sustainable growth and prosperity for all.