This joint report by Chartered Accountants Australia and New Zealand (CA ANZ), the University of Melbourne, the University of Queensland, and the Australian Accounting Standards Board (AASB) builds on our previous research into 2023 reporting, 2022 reporting and 2021 reporting.

Companies have continued to consider the financial effects of climate-related risks on their financial statements and are communicating this by way of disclosures in their financial statements. The IFRS Accounting Standards require companies to consider any risks (including climate-related risks) in their financial statements when the effect of those matters is material information for investors.

The introduction of mandatory climate-related disclosures is bringing the possible financial effects of climate-related risks into sharper focus, and companies are increasing making connections between their climate-related disclosures and their financial statements. The IFRS Sustainability Disclosure Standards require companies to report the current and anticipated effects of climate-related risks on the financial statements in their climate-related disclosures.

Some of the key findings identified are as follows:

• More than a third of companies have flagged climate risk in their financial statements (38%)
• Energy (77%) and utilities (75%) are the sectors with the greatest prevalence of companies flagging climate risks in their financial statements
• The number of companies flagging climate risks in their financial statements has more than doubled over the four-year study period from 18% in 2021 to 38% in 2024
• Over the four-year period of this study, the number of companies disclosing climate risks in their financials has grown significantly in the consumer staples (2024: 57%), industrials (49%), health care (35%) and real estate (30%) sectors
• Companies are flagging climate risk in relation to asset impairment (38%), critical accounting estimates (22%) and in estimating the useful lives of assets (13%)