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Editorial

World Accounting Report

Editorial

As the Amazon rainforest burns and scientists are engaged in ever more urgent efforts to monitor and understand man’s impact on the environment, it is telling that one particular area of focus in this month’s WAR is the publication of the European Commission’s Guidelines on reporting climate-related information. An important element in the process of assessing climate change is understanding its cause-and-effect relationship with big businesses. Commission Vice-President Dombrovskis announced: 1 “The climate emergency leaves us with no choice but transit to a climate-neutral economy model… Today’s Guidelines are part of the Commission’s ongoing efforts to ensure that the financial sector – private capital – can play a critical role in transitioning to a climate-neutral economy and in funding investments at the scale required.” The objective of the Guidelines is to help companies disclose how climate change is affecting them and how they are affecting climate change, so that investors receive better information for their decision making. The Guidelines integrate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) which was established as an international initiative by the Financial Stability Board, and chaired by Michael Bloomberg. European companies can use the Guidelines to understand how best to follow the TCFD recommendations and to comply with relevant EU law. Climate-change and sustainability are receiving huge amounts of attention from governments, regulators and many other interested parties. The news section features brief updates on other EU developments in this area. Another interesting publication is a consultation document, Recommendations for SDG Disclosures . 2 The initials SDG stand for UN Sustainable Development Goals and, while they encompass climate-change, they also address poverty, inequality and the degradation of the natural environment. The authors of the paper are Carol Adams, a leading academic in this field, Russell Picot, Special Advisor to the TCFD, and Paul Druckman, Chair of the World Benchmarking Alliance. The paper has been jointly published by three accounting bodies which highlights the pivotal role of accountants. This consultation will be covered in more detail in a later issue.

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