New guidance released on ‘rapidly evolving’ sustainability disclosures
Two professional bodies have released a new publication to address queries from accountants relating to nature-related financial disclosures.
CA ANZ and the Governance Institute of Australia have developed a publication, Nature-related Financial Disclosures: Frequently Asked Questions, to assist accounting and governance professionals.
The two bodies said the publication responds to growing interest from members and stakeholders who want to understand and address nature-related dependencies including the associated impacts, risks and opportunities of business activities.
It responds to questions frequently asked by members and stakeholders to CA ANZ and the Governance Institute concerning the evolving area of nature-related financial disclosures including thematic areas such as biodiversity and natural capital.
Some of the questions covered in the publication relate to the definition of nature and topical areas such as biodiversity, the importance of nature to business, greenwashing, the Taskforce on Nature-related Financial Disclosures (TNFD), and other fundamental areas relating to nature and the role of business.
The publication also addresses queries relating to whether financial disclosures are mandatory, director obligations around disclosures and how businesses can make environmental claims appropriately.
The publication noted that nature-related financial disclosures are evolving fast and that approaches and terminology are rapidly changing.
The expectations of accountants and governance professionals concerning nature-related issues are also quickly changing, it said.
CA ANZ chief executive Ainslie van Onselen said the publication will empower organisations to engage effectively with nature-related risks and opportunities, as approaches to disclosures and terminology rapidly develop.
“While there is a current focus on the effects of climate change, more than half of the world’s total GDP, approximately US$44 trillion, is moderately or highly dependent on nature and its services," van Onselen said.
“Through this simple FAQ, business leaders will be able to understand, incorporate and communicate nature-related dependencies and common issues to interested stakeholders and investors."
Governance Institute chief executive Megan Motto welcomed the publication and emphasised the significance of this initiative.
"As leaders, we recognise that every organisation, regardless of size or sector, is intrinsically linked to the environment," Motto said.
“It’s important that leaders gain a better understanding of when nature-related disclosures might be required to facilitate sustainable growth and risk management."
The associations said the publication provides essential insights for businesses navigating this evolving landscape and offers guidance for institutions of all sizes to ensure they are in the loop with good governance practices and current global and domestic developments around nature-related disclosures.
“It is important that we are across these developments and are ready to address questions that members are asking in this space and provide practical resources to encourage a deeper dive”, van Onselen said.
