Disclosure standards: Definition
Standards for carbon accounting disclosure encompass the guidelines, frameworks, and reporting requisites followed by organisations to transparently and consistently report their greenhouse gas emissions and other climate-related information. Several standards include the GHG Protocol, Carbon Disclosure Project (CDP), Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative (GRI), and Science-Based Targets (SBTs).
For Sustainability Managers
Understanding Disclosure standards is essential for accurately tracking and reducing your organisation's carbon footprint.
For CFOs
Disclosure standards directly impacts financial planning, risk exposure, and regulatory compliance costs.
For Sustainability Reporting
Disclosure standards is a core element of sustainability reporting that auditors and regulators expect to see addressed.
Related Terms
IFRS Sustainability Disclosure Standards
In June 2023, the International Sustainability Standards Board (ISSB) issued its inaugural pair of IFRS® Sustainability Disclosure Standards: IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. These standards are applicable for annual reporting periods commencing on or after January 1, 2024. Companies are mandated to apply both IFRS S1 and IFRS S2 together to demonstrate compliance with IFRS Sustainability Disclosure Standards. Nevertheless, the ISSB offers transitional relief for some requirements during the first year of application of IFRS S1 and IFRS S2.
Climate-related Financial Disclosure
Climate-related Financial Disclosures aims to enhance and expand the reporting of financial information related to climate change. Investors and markets require clear, comprehensive, and high-quality information about the effects of climate change to make informed decisions about companies' climate-related risks. This includes assessing risks and opportunities arising from rising temperatures, climate policies, and emerging technologies in a changing world.
1.5°C
The Paris Agreement commits countries to limit global warming to well below 2°C above pre-industrial levels, with an even more ambitious target of 1.5°C to avert severe climate changes. Achieving the 1.5°C trajectory necessitates halving emissions by 2030 and reaching net-zero emissions by 2050.
AASB
The Australian Accounting Standards Board (AASB) is a government agency in Australia responsible for developing and maintaining financial reporting standards applicable to entities in both the private and public sectors of the Australian economy. This includes the development of accounting and external reporting standards and guidance related to sustainability-related financial information, which is aligned with principles, caters to external report users' needs, and can be subject to assurance and enforcement.
Accreditation
Accreditation refers to the procedure through which an official acknowledgment is bestowed upon a certification body or organisation, affirming their competence and ability to carry out certification assessments that are both valid and dependable. Normally, accreditation is provided by an acknowledged accreditation entity that assesses the certification body's procedures, proficiency, and adherence to global standards.