The project is designed to improve the way companies report the risks, but there are no intentions to make significant changes to current standards, particularly as new standards on climate disclosures are due to be launched by the end of June this year.

The IASB said it had taken the decision to look at this area following calls from stakeholders for more clarity about the impact of climate related risks in financial reporting. Many users of financial statements said that climate-related risks are ‘often perceived as remote, long-term risks and may not be appropriately considered in the financial statements’.

Investors also wanted to see better qualitative and quantitative information about the effect of climate-related risks on the carrying amounts of assets and liabilities reported in the financial statements.