Accountants looking to improve their greenhouse gas reporting can turn to a dedicated guide published last week to help them prepare their numbers ahead of incoming mandatory disclose requirements for businesses.
Aimed at professional accountants and finance professionals, the new GHG reporting guidance has been developed by the We Mean Business Coalition (WMBC) and the International Federation of Accountants (IFAC), with support from Accounting for Sustainability (A4S), Global Accounting Alliance (GAA) and World Business Council for Sustainable Development (WBCSD).
The guidance has been prepared in response to the “rapidly escalating” impacts of climate change, as well as emerging mandatory requirements for companies to disclose increasingly detailed and robust information regarding their emissions, climate risks and opportunities to invest capital towards the “greenest” companies, according to the IFAC.
It is also designed to help chief financial officers, accountants and finance professionals build on existing reporting systems and processes, in order to enhance cost-effective and investor-grade GHG reporting, it explained.
“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’s chief executive. “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.”
The guidance comes in two parts. The first document seeks to provide accountants with a roadmap to help prepare them for upcoming GHG emissions reporting requirements, while the second offers advice on collecting and enhancing the quality of data related to all scopes of emissions at individual and group levels, the organizations said.
Both publications have been released ahead of upcoming international and jurisdictional standards and regulations set to make it mandatory for companies to report on their greenhouse gas emissions in order to provide investors with key information related to climate-risks and opportunities.
These include the forthcoming 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 climate change disclosure rules proposed by the US Securities and Exchange Commission (SEC).
“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,” explained Maria Mendulice, CEO of the We Mean Business Coalition. “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.”