Date posted: 02/02/2024

Climate-related financial impacts

This study investigates how the impacts of climate risk are being reflected in financial statements.

In brief

  • Companies are increasingly recognising the financial impacts of climate-related risks
  • Impairment of non-current assets is the biggest financial impact of climate-related risks
  • Climate-sensitive sectors are more likely to disclose the financial impacts of climate-related risks

The latest research by CA ANZ, the University of Melbourne and the University of Queensland has found an increase in the proportion of entities that report on climate-related risks in their financial statements, with 35% of entities now disclosing climate-related risks in the notes to their financial statements, compared to 18% two years ago.

We analyse the impacts overall and look at the financial statement areas most affected, as well as comparisons across industry sectors among listed companies in Australia, New Zealand and internationally. This is the third year we have analysed the financial impacts of climate on companies worldwide, and this report builds on our two previous publications into 2021 reporting and 2022 reporting.

Over the past two years we have seen a significant increase from the 2021 baseline in companies financially impacted by climate. The proportion of companies in the Australian and global sample making financial statement disclosures on climate increased substantially during the period from 2021 to 2022 and has since remained relatively stable at around a third of all companies. While lower in prior years, the proportion of New Zealand companies making climate disclosures in their financial statements has almost doubled in the past year.

The main area of the financial statements impacted by climate-related risks is impairment of non-current assets. The reporting of climate-related risks in financial statements is most prevalent in the energy and utilities sectors.

Media release

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