Simplify Climate

The UK clean energy transition announcement is more than a transition regulatory milestone, it is a financial and strategic pivot point affecting your financial statements... The recent announcement of ambitious clean energy targets, as highlighted in Bloomberg article, represents a significant step towards a low-carbon economy. While the specifics and timeline of implementation are still to be determined, #businesses should begin considering how such policies might impact their #financialreporting and #strategicplanning. Examples of some accounting considerations for you to be aware of: 1️⃣ Impairment reviews: Companies with fossil fuel or high-carbon assets may need to reassess future cash flow assumptions under IAS 36 if the policy specifics create credible shifts in demand or pricing. 2️⃣ Stranded assets and depreciation assumptions: Accelerated obsolescence of certain assets could necessitate adjustments to useful lives and depreciation schedules, ensuring alignment with revised operational expectations. 3️⃣ Provisions and contingent liabilities: The announcement may lead to increased decommissioning or remediation obligations. These could require recognition and measurement under IAS 37 as more details emerge. 4️⃣ Indirect impacts: Businesses outside the energy sector may face secondary effects, such as #supplychain disruptions or fluctuating energy costs, influencing cost structures and #financialplanning. 5️⃣ Alignment to reporting frameworks: #Sustainability reporting under frameworks #TCFD, #ukcfd or #ISSB standards may gain even greater prominence as organisations respond to evolving policy requirements. Transparent disclosures of risks, opportunities, and carbon reduction efforts will become fundamental. Start adapting your reporting and planning processes to better navigate transition risks and uncover opportunities for long-term #resilience and #valuecreation. Has your organisation started reviewing how evolving energy policies might affect your assumptions and judgments on asset valuations, cash flow forecasts, or financial disclosures? #climatechange #climateaction #accounting #ifrs

Accounting standards tackling climate change? You heard that right. Financial reporting is no longer just about numbers, it’s about resilience, transparency, and leading your business into a sustainable future. The new International Sustainability Standards Board (ISSB) IFRS S1 and S2 standards are your GPS to navigate the risks and opportunities tied to climate change. 💡 We’re not just a consultancy; we’re your dedicated management experts, helping you unlock real value while meeting today’s sustainability challenges head-on. 📧 Contact us: [email protected] 🌐 Learn more: www.simplifyclimate.co.uk #climatechange #sustainability #environment #accounting

Your stakeholders expectations are not decreasing... In an investor update, Swiss Re revealed that large natural catastrophe claims reached $813 million in the first nine months of 2024, with $743 million incurred in Q3 alone. Key drivers: ⛈️ A severe hailstorm in August in Calgary, Canada ⛈️ Storm Boris in Europe ⛈️ Hurricanes Debby and Helene in the US This marks the fifth consecutive year where natural catastrophe losses have exceeded $100 billion globally. This will put further pressures on insurers to increase insurance premiums in the regions affected. #climatechange #insurance #flooding #weather #sustainability

The hidden cost - are you investing enough in training your employees and suppliers to help you achieve your #climatechange, #socialimpact and #sustainability commitments? Many businesses have set ambitious net zero and sustainability commitments, however, one critical investment is often overlooked - training your employees and suppliers to achieve them. Without the right skills, these commitments risk becoming unfulfilled promises rather than drivers of long-term resilience and innovation. As reported by the Financial Times: ✅ November 2024 was the second-warmest on record, with sea surface temperatures hitting 20.58°C. ✅ 2024 is virtually certain to be the warmest year on record, potentially surpassing 1.5°C above pre-industrial levels for the first time. ✅ Extreme weather such as floods, storms, and heavier rainfall, are already disrupting regions across the UK, Europe, Asia, and the Americas. Without proper training: your risk assessments will lack accuracy, targets won’t translate into action, and you may be at risk of non compliance by setting the wrong foundation/baseline as expected by your stakeholders and regulators. Your #businesses may face greater costs: fines, missed opportunities, and operational disruptions.

Climate change accounts for >1/3 insured weather losses this century. Fossil fuel premiums account for less than 2% of insurers' business, yet the damage they enable threatens the other 98%. It’s time for businesses to act... Insurers are raising premiums and pulling back coverage for businesses and communities hit hardest by climate risks, such as the US Gulf Coast, devastated by hurricanes intensified by record ocean temperatures. New findings from Insure Our Future Global shows climate change has driven $600 billion in insured weather losses over the last two decades, with climate-attributed losses ($10.6bn) now matching insurers' fossil fuel underwriting premiums ($11.3bn). For businesses, its an opportunity to act and start integrating #climatechange and #nature into your business model and reporting. 2024 is expected to be hotter than 2023 creating a landscape of more extreme weather events, making business resilience a financial imperative. What can you do? 1. Align your strategy to your stakeholder expectations: Prioritise climate & nature transition plans in line with Transition Plan Taskforce (TPT) and / Taskforce on Nature-related Financial Disclosures (TNFD) to meet investor and regulatory expectations. 2. Perform an initial climate #riskassessment and test your #businessresilience: Identify assets most at risk and begin to understand scenario analysis to test resilience and implement measures to mitigate future risks. 3. Increase your team’s #climateawareness and understanding of #IFRS climate-related education materials to build internal capability and ensure compliance with evolving reporting standards, positioning your business for long-term resilience. 4. Protect your balance sheet: Address liability risks, asset impairments, and rising insurance costs. Transparent reporting aligned to frameworks like FSB Task Force on Climate-related Financial Disclosures (TCFD), UK-CFD, and International Sustainability Standards Board (ISSB) IFRS S2 will help you secure stakeholder trust and access to improve borrowing rates. Proactive businesses aren’t just mitigating risk, they’re unlocking cost efficiencies, staying insurable, and attracting investors. #businesses have the opportunity to lead through #climateaction and secure long-term financial stability. #insurance #climatechange #sustainability #weather