The report focuses on financial information and therefore does not discuss recently issued sustainability standards such as the European Sustainability Reporting Standards or those issued by the International Sustainability Standards Board (ISSB).
The report concludes that while IFRS generally enable entities to effectively reflect climate-related risks in their financial statements, minor amendments in the following areas would have positive implications for financial stability: (i) the application of the materiality principle under IAS 1, (ii) the addition of climate factors to the list of indicators of impairment of non-financial assets under IAS 36, (iii) how provisions and contingent liabilities should be recognised according to IAS 37 in view of climate-related risks, and (iv) additional disclosure requirements, examples and guidance on how climate-related risks should be incorporated into the estimation of expected credit losses and the fair value of financial instruments. Work on the accounting treatment of pollutant pricing (i.e., carbon pricing) mechanisms should also be prioritised.