Climate Change Accounting and Sustainability Reporting (Course Id 2440)

Climate-change and sustainability are topics that are increasingly on the minds of investors and other stakeholders. Companies are increasingly subject to nonfinancial reporting requirements relating to environmental, social and governance factors. For example, sustainability reporting requirements are increasingly impacting the investment and lending activities of global financial institutions. Investors now expect businesses to frame decisions in terms of environmental, social, and human impact for the long-term, rather than on short-term gains such as next quarter's earnings report. This course reviews the prevailing sustainability reporting and the nonfinancial reporting frameworks.

This course also reviews the accounting for climate-change risks under U.S. Generally Accepted Accounting Principles (U.S. GAAP) and International Financial Reporting Standards (IFRS). While these Standards do not cover climate-change risks and other emerging risks explicitly, they do address issues that relate to them. This course reviews the application of those Standards and the related guidance on materiality to climate and other emerging risks.

NASBA QAS - Text - NASBA Registry - 2440

Course Learning Objectives

• Identify the potential economic impacts and financial risks of climate change.
• Recognize disclosure practices that are consistent with leading sustainability reporting frameworks.
• Identify areas of accounting and financial statement disclosures that are impacted by climate-related and other emerging risks

Chapter 1
Climate Change and the Economy

• Define ‘climate change’ and ‘global warming’; identify the factors that are believed to cause these trends.
• Recognize the potential economic impacts of climate change.
• Identify the financial risks associated with climate change.

Chapter 2
Sustainability Disclosures

• Recognize how companies supplement their traditional financial statements with nonfinancial disclosures that highlight ESG (environment, social, and governance) issues.
• Identify the potential benefits of strong sustainability reporting practices and the potential pitfalls of “greenwashing”.
• Recognize disclosure practices that are consistent with leading sustainability reporting frameworks.

Chapter 3
Climate Change Accounting

• Recognize best practices for disclosing material information about climate-related and other emerging risks in the financial statements.
• Identify areas of accounting that are impacted by climate-related and other emerging risks.

Chapter 1 - Climate Change and the Economy

1.1   What is Climate Change?

1.1.1   Climate change defined

1.1.2   Causes of climate change

1.1.3   Macroeconomic effects of climate change

1.2   Environmental Policy

1.2.1   History of U.S. environmental policy

1.2.2   The origins of the Environmental Protection Agency (EPA)

1.2.3   EPA climate change policies

1.3   Climate Change and Financial Risks

1.3.1   Financial risks

1.3.2   Climate change risks

1.3.3   History of climate change risks in financial markets

Chapter 2 - Sustainability Disclosures

2.1   What is Sustainability Reporting?

2.1.1   Sustainability and ‘ESG’ issues

2.1.2   Sustainability reporting

2.1.3   Triple bottom line theory

2.1.4   Greenwashing

2.2   Current Sustainability Reporting Guidance

2.2.1   Global Reporting Initiative Standards

2.2.2   Sustainability Accounting Standards

2.2.3   Recommendations of the Task Force on Climate-Related Financial Disclosures

2.3   The Future of Sustainability Reporting

2.3.1   International Sustainability Standards Board (ISSB)

2.3.2   SEC Climate Disclosure Requirements

Chapter 3 - Climate Change Accounting

3.1   Materiality Judgments

3.1.1   Materiality under IFRS

3.1.2   Materiality under U.S. GAAP

3.2   Financial Accounting Impacts

3.2.1   Fair value measurements

3.2.2   Asset impairments

3.2.3   Contingencies

3.2.4   Credit losses on financial instruments

Appendix - What is Carbon Accounting?

Glossary