IDEAS home Printed from https://ideas.repec.org/a/bla/ausact/v35y2025i4p324-341.html

Climate‐Related Risk Reporting and the Role of Management Accountants

Author

Listed:
  • Jayanthi Kumarasiri
  • Leanne Morrison
  • Laura Maran

Abstract

The aim of this study is to provide evidence of how Australian companies prepared themselves for climate‐related risk reporting in its early voluntary stages, with a particular focus on the role of management accountants and whether the approach adopted by management was likely to equip these companies well for the disclosure requirements of the standards that followed. The Task Force on Climate‐Related Financial Disclosures (TCFD) Framework, issued in 2017, signalled to companies the importance of preparing for change in climate‐related risk reporting. The subsequent International Sustainability Standards Board (ISSB) Standard IFRS S2 Climate‐Related Disclosure requirements issued in 2023 and its (phased) mandated Australian Sustainability Reporting Standard counterpart AASB S2 of the same name rely heavily on the concepts embedded in the TCFD Framework. In 2021, we interviewed 18 senior managers involved in climate‐related risk reporting as well as two managers from consultancy firms providing advisory services on this topic. The interview data revealed that management encountered both internal and external challenges in implementing climate‐related risk reporting and increasingly engaged external consulting firms to develop scenario analyses and enhance their climate resilience reporting. The findings reveal a significant lack of involvement from management accountants in companies' climate change risk management activities, indicating a more symbolic than substantive approach to addressing climate risks. The interviews provide insights into how the role of management accountants in climate‐change risk management can be enhanced to promote more significant and substantive climate actions within their companies.

Suggested Citation

  • Jayanthi Kumarasiri & Leanne Morrison & Laura Maran, 2025. "Climate‐Related Risk Reporting and the Role of Management Accountants," Australian Accounting Review, CPA Australia, vol. 35(4), pages 324-341, December.
    • Handle: RePEc:bla:ausact:v:35:y:2025:i:4:p:324-341
    DOI: 10.1111/auar.70013
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/auar.70013
    Download Restriction: no
    File URL: https://libkey.io/10.1111/auar.70013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Leanne J. Morrison & Alan Lowe, 2021. "Into the woods of corporate fairytales and environmental reporting," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 34(4), pages 819-848, March.
    2. Sue Hrasky, 2012. "Carbon footprints and legitimation strategies: symbolism or action?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 25(1), pages 174-198, January.
    3. Xuhui Peng & Jingduan Li & Qingliang Tang & Yi‐Chen Lan & Xinjian Cui, 2024. "Do environmental scores become multinational corporations' strategic “greenwashing” tool for window‐dressing carbon reduction? A cross‐cultural analysis," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 2084-2115, March.
    4. repec:eme:aaaj00:09513571211191798 is not listed on IDEAS
    5. Francesca Manes‐Rossi & Giuseppe Nicolo', 2022. "Exploring sustainable development goals reporting practices: From symbolic to substantive approaches—Evidence from the energy sector," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1799-1815, September.
    6. Martina Kurki & Marko Järvenpää, 2024. "Engaging management accountants in corporate sustainability," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 37(9), pages 100-127, June.
    7. Sue Hrasky, 2012. "Carbon footprints and legitimation strategies: symbolism or action?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 25(1), pages 174-198, January.
    8. Martina K. Linnenluecke & Jacqueline Birt & Andrew Griffiths & Kathy Walsh, 2015. "The role of accounting in supporting adaptation to climate change," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 55(3), pages 607-625, September.
    9. Otley, David T., 1980. "The contingency theory of management accounting: Achievement and prognosis," Accounting, Organizations and Society, Elsevier, vol. 5(4), pages 413-428, October.
    10. Judith L. Walls & Pascual Berrone, 2017. "The Power of One to Make a Difference: How Informal and Formal CEO Power Affect Environmental Sustainability," Journal of Business Ethics, Springer, vol. 145(2), pages 293-308, October.
    11. Rautiainen, Antti & Scapens, Robert W. & Järvenpää, Marko & Auvinen, Tommi & Sajasalo, Pasi, 2024. "Towards fluid role identity of management accountants: A case study of a Finnish bank," The British Accounting Review, Elsevier, vol. 56(4).
    12. Jayanthi Kumarasiri & Christine Jubb, 2016. "Carbon emission risks and management accounting: Australian evidence," Accounting Research Journal, Emerald Group Publishing Limited, vol. 29(2), pages 137-153, July.
    13. Jayanthi Kumarasiri & Christine Jubb, 2016. "Carbon emission risks and management accounting: Australian evidence," Accounting Research Journal, Emerald Group Publishing Limited, vol. 29(2), pages 137-153, July.
    14. Carmela Gulluscio & Pina Puntillo & Valerio Luciani & Donald Huisingh, 2020. "Climate Change Accounting and Reporting: A Systematic Literature Review," Sustainability, MDPI, vol. 12(13), pages 1-31, July.
    15. Ao Li & Eric C.T. Lee, 2023. "Commentary: Climate‐Related Risks Disclosures in the Notes to Financial Statements: Descriptive Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 33(3), pages 230-236, September.
    16. Jibriel Elsayih & Rina Datt & Qingliang Tang & Ali Hamid & Maria Estela Varua, 2023. "Exploring the determinants of carbon management system quality: The role of corporate governance and climate risks and opportunities," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4065-4091, December.
    17. repec:eme:aaaj00:aaaj-03-2020-4466 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yaowen Shan & Sue Wright, 2025. "International Experiences With Good Governance," Australian Accounting Review, CPA Australia, vol. 35(4), pages 307-308, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pramila Shrestha & Bobae Choi & Le Luo & Junru Zhang, 2025. "Carbon Management System and Firm Operational Efficiency," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(4), pages 3710-3738, December.
    2. Ubaldo Comite & Alba Maria Gallo & Francesco Albergo & Valentina Beretta, 2025. "Accounting for Climate Change: A Temporal Analysis of the Literature," Business Strategy and the Environment, Wiley Blackwell, vol. 34(7), pages 8213-8236, November.
    3. Rong He & Le Luo & Abul Shamsuddin & Qingliang Tang, 2022. "Corporate carbon accounting: a literature review of carbon accounting research from the Kyoto Protocol to the Paris Agreement," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 261-298, March.
    4. Hasan, Mostafa Monzur & Bhuiyan, Md Borhan Uddin & Taylor, Grantley, 2025. "Reprint of: Corporate culture and carbon emission performance," The British Accounting Review, Elsevier, vol. 57(1).
    5. Jianyu Zhao & Jing Qu & Lei Wang, 2023. "Heterogeneous institutional investors, environmental information disclosure and debt financing pressure," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 253-296, March.
    6. Chen, Yuan & Feng, Yunting & Lai, Kee-Hung & Zhu, Qinghua, 2025. "Value of blockchain for scope 3 carbon disclosure: The moderating role of data processing technologies," International Journal of Production Economics, Elsevier, vol. 279(C).
    7. Dragomir Voicu D. & Dumitru Mădălina & Duţescu Adriana & Perevoznic Mădălina Florentina, 2023. "Empirical Assessment of Carbon Reduction and Energy Transition Targets of European Companies," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 718-727, July.
    8. Matthew P. Johnson & Theresa S. Rötzel & Brigitte Frank, 2023. "Beyond conventional corporate responses to climate change towards deep decarbonization: a systematic literature review," Management Review Quarterly, Springer, vol. 73(2), pages 921-954, June.
    9. Rina Datt & Reuben Segara & Jin Young Yang, 2025. "Do Carbon Assurance Providers Play a Strategic Role in Moderating the Relationship Between Carbon Emissions and Firms’ Cost of Equity?," Abacus, Accounting Foundation, University of Sydney, vol. 61(3), pages 786-818, September.
    10. Habib Zaman Khan & Muhammad Nurul Houqe & Ielemia K Ielemia, 2023. "Organic versus cosmetic efforts of the quality of carbon reporting by top New Zealand firms. Does market reward or penalise?," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 686-703, January.
    11. Paolo Esposito & Emanuele Doronzo & Vincenzo Riso & Massimiliano Tufo, 2025. "Sustainability in Energy Companies Under the Lens of Cultural Pressures: When Do We Talk of Greenwashing?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 32(3), pages 3814-3831, May.
    12. Kumarasiri, Jayanthi & Gunasekarage, Abeyratna, 2017. "Risk regulation, community pressure and the use of management accounting in managing climate change risk: Australian evidence," The British Accounting Review, Elsevier, vol. 49(1), pages 25-38.
    13. Julia Bartosch & Manuel Nicklich & Gregory Jackson, 2026. "Employee Voice and Corporate Governance: Power and Engagement for the Environment," ILR Review, Cornell University, ILR School, vol. 79(1), pages 5-35, January.
    14. Cooke, Fang Lee & Wang, Jingtian & Wood, Geoffrey, 2025. "What do we know about climate change and multinational enterprises?: A systematic review and an integrated theoretical framework for future research," Journal of Business Research, Elsevier, vol. 200(C).
    15. Irina Bogataya & Elena Evstafyeva & Denis Lavrov & Ekaterina Korsakova & Natalya Mukhanova & Svetlana Solyannikova, 2022. "Disclosure of Information in Risk Reporting in the Context of the Sustainable Development Concept," Sustainability, MDPI, vol. 14(4), pages 1-21, February.
    16. Le Luo & Qingliang Tang, 2022. "National culture and corporate carbon performance," Australian Journal of Management, Australian School of Business, vol. 47(3), pages 503-538, August.
    17. Rina Datt & Le Luo & Reuben Segara, 2025. "Voluntary carbon assurance and the cost of equity capital: International evidence," Australian Journal of Management, Australian School of Business, vol. 50(4), pages 1129-1165, November.
    18. Vasilii Erokhin & Dmitry Endovitsky & Alexey Bobryshev & Natalia Kulagina & Anna Ivolga, 2019. "Management Accounting Change as a Sustainable Economic Development Strategy during Pre-Recession and Recession Periods: Evidence from Russia," Sustainability, MDPI, vol. 11(11), pages 1-23, June.
    19. Gary F. Peters & Andrea M. Romi & Juan Manuel Sanchez, 2019. "The Influence of Corporate Sustainability Officers on Performance," Journal of Business Ethics, Springer, vol. 159(4), pages 1065-1087, November.
    20. Xu, Chong & Tao, Miaomiao & Qi, Lingli & Roubaud, David, 2025. "Can green CEOs trigger the green premium effect?," Finance Research Letters, Elsevier, vol. 80(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ausact:v:35:y:2025:i:4:p:324-341. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1035-6908 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.