Guidance for companies disclosing climate related financial impacts
The IFRS Foundation has published new educational material to guide companies in using the International Sustainability Standards Board (ISSB) Standards for reporting the anticipated financial effects of sustainability-related risks and opportunities. The material responds to feedback that preparers need more practical support on this complex reporting requirement.
The guidance clarifies how companies should connect sustainability disclosures to their financial statements, focusing on how risks and opportunities are expected to affect strategy, performance, and cash flows over the short, medium, and long term. It also introduces mechanisms to help companies balance rigour with proportionality by using reasonable, supportable information without undue cost or effort. In practice, that means disclosures can include a mix of qualitative and quantitative data, and in some cases, ranges rather than single-point estimates.
For digital reporting, the move is a reminder of why consistent, structured disclosure is critical. Anticipated effects are by definition forward-looking and uncertain; without standardisation, comparability would quickly evaporate. High-quality, machine-readable data will be key to ensuring that investors can make sense of these forward-looking statements in a meaningful way.
The full educational guidance is available on the IFRS Foundation website here.
