FASAB forming task force on climate reporting

The Federal Accounting Standards Advisory Board is looking for volunteers to join a new task force it is forming on climate-related financial reporting.

FASAB said Thursday it approved a research topic to develop a climate-related financial disclosure framework, and as part of that effort, its staff is forming a task force to support the board. FASAB wants to find out what information federal financial statement users need about climate risk; what agencies are implementing and reporting in relation to the many climate-related executive orders; and which governments are using the Taskforce for Climate-related Financial Disclosure (TCFD) recommendations for reporting, how they use the information, and lessons learned in implementing TCFD.

The move comes as more accounting standard-setters get involved in environmental, social and governance reporting. The International Financial Reporting Standards Foundation, which oversees the International Accounting Standards Board, launched an International Sustainability Standards Board last fall that it will oversee alongside the IASB. Several other ESG standard-setters agreed to be consolidated into the ISSB, including the Value Reporting Foundation, which earlier merged the Sustainability Accounting Standards Board with the International Integrated Reporting Council (see story).

Krisztian Bocsi/Bloomberg

The Financial Accounting Standards Board also agreed in May to add an ESG project to its agenda after hearing demand from stakeholders, although it has largely steered clear of non-financial standard setting (see story). But as climate change becomes an increasing concern, especially with record-breaking temperatures in recent years and during a summer heat wave blanketing the U.S. and Europe, federal accounting standard-setters are taking notice. However, the evenly divided Congress remains stymied on taking any concrete action while the Biden administration searches for ways to use executive actions that risk being overruled by the Supreme Court. 

FASAB said it is seeking broad task force representation to include financial statement users, preparers and auditors, as well as relevant operational and technical experts. Task force members should have experience in any of the following areas:

• Enterprise risk management (ERM) — climate risk;
• Physical risks (mitigation and adaptation of federal assets for resilience — setting policy, implementation and reporting;
• Transition risk and opportunity in transitioning to net-zero — setting policy, implementing opportunities and reporting; and
• Financial statement preparers reporting on climate-related events and risks.

“As we embark on this important and timely project, the board welcomes volunteers willing to share their expertise and knowledge as we strive to improve financial reporting,” said FASAB chair George Scott in a statement. 
Those who are interested in becoming volunteers for the task force should send an email by Aug. 15 to Robin Gilliam at gilliamr@fasab.gov. The email should include the volunteer’s name, organization, title, contact information, their experience with climate, and why they would like to join the FASAB climate task force.

FASAB staff expects the first task force meeting to happen in September.