Olga Efimova, Olga Rozhnova
Cite: Efimova O., Rozhnova O. Financial reporting and climate-related disclosures. J. Digit. Sci. 2(1), 67 – 75 (2020). https://doi.org/10.33847/2686-8296.2.1_6
Abstract. The article examines disclosures on climate-related risks in financial statements. The conducted study has analyzed corporate reports (financial, integrated, environmental, on sustainable development) of leading Russian metallurgical companies that consider climate change influence or environmental impacts as the most significant. The following conclusion is derived from conducted research. Majority of climate-related disclosures are currently made in broader corporate reports, primarily in ecological, social responsibility and sustainable development reports. There is almost no information about climate-related risks in financial statements, and there are no corresponding cross-references on environmental issues between financial and non-financial reports. Climate-related risks impact most important indicators of financial statements, corporate strategy and business model. Materiality of information on climate change impact on companies’ financial position, performance and cash flows need to be considered in the context of financial statements. The aim of the study is to confirm the materiality of climate-related risk disclosure for interested users, existing insufficiency of such disclosures in financial statements and make proposals on filling the identified information vacuum. The article offers recommendations on feasibility of developing a new standard “Climate risks: Disclosures”, which should provide users with essential information on the judgments and assumptions related to assessment of climate-related risks` impact on financial statements.
Keywords: financial and non-financial reporting, climate-related risks disclosures, financial consequences of climate-related risks.
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Published online 29.05.2020