ESG / CAPITAL MARKETS | CONSOB publishes a call for attention on climate disclosures in financial statements

On 20 December 2024, Consob published a call for attention about climate disclosure reporting in financial statements, in light of the elements emerging from analyses conducted on the subject and in view of the forthcoming entry into force of the sustainability reporting obligations required by Legislative Decree No. 125/2024 of 6 September 2024 (implementing Directive (EU) 2022/2464 on corporate sustainability reporting, CSRD). In particular, Consob carried out an in-depth study on a sample of issuers belonging to the FTSE-MIB from which, while noting a process of progressive adjustment of financial reporting, Consob found that there were still significant areas for improvement. To this end, the Authority identified three areas worthy of consideration by issuers: (a) facilitating investors in identifying information on climate aspects; (b) promoting consistency between financial and sustainability disclosures; and (c) providing clear disclosure on evaluations made about the impact of climate factors. In particular, Consob urged issuers to consider whether to disclose information on climate aspects in a specific note to the financial statements or to include specific references to the notes in which these are represented. In light of the information that will be required in sustainability reports as from the 2024 financial year pursuant to Decree No. 125/2024 and, above all, the new ESRS (European Sustainability Reporting Standard) principles regarding any transition plan that may be adopted, Consob also pointed out that issuers must provide relevant information in the financial statements to allow investors to appreciate the impact, if any, of the actions identified in such plans on the accounting estimates, representing the assessments that led to the recognition or non-recognition of impacts in the financial statements. Finally, the statement emphasises the importance for issuers to disclose the impact of climatic factors, where material and reliably estimable, on the useful life of balance sheet assets, the measurement of expected credit losses and the measurement of insurance contracts, and to provide information to help understand the considerations made and the causes of estimation uncertainty.

Newsletter n. 103 – January 2025