ASTM E2718-16

Standard Guide for Financial Disclosures Attributed to Climate Change

SIGNIFICANCE AND USE
4.1 Uses—This guide is intended for use on a voluntary basis by a reporting entity that provides disclosure in its financial statements regarding financial impacts attributed to climate change. The degree and type of disclosure depends on the scope and objective of the financial statements. This guide is intended to apply to U.S. and international operations at the discretion of the reporting entity.3 The user should be aware that there may be contractual obligations, court decisions, or regulatory directives that may affect the flexibility in use of this guide. The user should also maintain an awareness of international regulations that may be relevant to disclosures, such as those of the International Accounting Standards Board and International Financial Reporting Standards.  
4.2 Principle:  
4.2.1 The following principles are an integral part of this guide and are intended to be referred to in resolving any ambiguity or dispute regarding the interpretation of financial disclosures regarding financial impacts attributed to climate change.  
4.2.1.1 Uncertainty Not Eliminated—Although a reporting entity, as of the time when its financial statements are prepared, may have evaluated the existence and extent of financial impacts attributed to climate change, there remains uncertainty with regard to the final resolution of scientific, technological, regulatory, legislative, and judicial matters, which could affect its financial impacts attributed to climate change. These uncertainties cannot be eliminated. While this standard recommends the development of reasonable scenarios or ranges to recognize and address uncertainties, it is unlikely that all climate change uncertainties will be foreseeable. However, it is likely that some financial impacts attributed to climate change are foreseeable and that alternatives, boundaries, or ranges of potential impacts can be assessed and quantified.
4.2.1.2 Comparison with Subsequent Disclosures—Subsequent disclosures that ...
SCOPE
1.1 Purpose—The purpose of this guide is to provide a series of options or instructions consistent with good commercial and customary practice for climate change-related disclosures accompanying audited and unaudited financial statements. This guide encourages consistent and comprehensive disclosure of financial impacts attributed to climate change.  
1.2 Objective—The objective of this guide is to determine the conditions warranting disclosure and the content of appropriate disclosure.

General Information

• Status: Historical
• Publication Date: 31-Jul-2016
• ICS: 03.060 - Finances. Banking. Monetary systems. Insurance
• Technical Committee: E50 - Environmental Assessment, Risk Management and Corrective Action
• Drafting Committee: E50.05 - Environmental Risk Management

Standards Content (Sample)

NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
Contact ASTM International (www.astm.org) for the latest information
Designation: E2718 − 16
Standard Guide for
1
Financial Disclosures Attributed to Climate Change
This standard is issued under the fixed designation E2718; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope 3.1.2.1 Discussion—In this guide, the short form designa-
tions of ‘financial impact’ and ‘impact’ are also used to
1.1 Purpose—The purpose of this guide is to provide a
designate this specific concept.
series of options or instructions consistent with good commer-
3.1.3 financial statement(s)—include, but are not limited to,
cial and customary practice for climate change-related disclo-
statements associated with shareholder reporting, periodic
sures accompanying audited and unaudited financial state-
reports, registration statements, loans, mergers, acquisitions, or
ments. This guide encourages consistent and comprehensive
divestitures. Financial statements may include statements out-
disclosure of financial impacts attributed to climate change.
side of SEC filings.
1.2 Objective—The objective of this guide is to determine
3.1.4 greenhouse gas—includes carbon dioxide, methane,
the conditions warranting disclosure and the content of appro-
nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sul-
priate disclosure.
fur hexafluoride.
2. Referenced Documents
3.1.5 materiality—the significance of an item to users of a
2
financial statement that considers all relevant and surrounding
2.1 ASTM Standards:
circumstances. A material item is one that its omission or
E2137 Guide for Estimating Monetary Costs and Liabilities
misstatement is of such a magnitude in the surrounding
for Environmental Matters
circumstances that either the judgment of a reasonable person
E2173 Guide for Disclosure of Environmental Liabilities
relying on the financial statement would have been changed or
E2725 Guide for Basic Assessment and Management of
influenced by its inclusion or correction, or there is a substan-
Greenhouse Gases
tial likelihood that the item, after assessing the inferences, and
E3032 Guide for Climate Resiliency Planning and Strategy
their significance, drawn from the given set of facts associated
3. Terminology with the financial statement, would be viewed as significantly
altering the information made available to the investor or
3.1 Definitions of Terms Specific to This Standard:
shareholder. (For additional information on materiality, see
3.1.1 climate change—any change in climate over time
Guide E2173.)
whether due to natural variability or as a result of human
3.1.6 stranded assets—an asset that has become obsolete or
activity. (Definition from the Intergovernmental Panel on
non-performing,asisaccountedfortoreflectitsreducedvalue.
Climate Change.)
3.1.7 supply chain—the sequence of processes involved in
3.1.2 financial impacts attributed to climate change
the production and distribution of a commodity, for example,
—material financial impacts on a company’s performance,
raw materials to manufactureres to customers/retail outlets.
operations, assets, and liabilities attributed to climate change
effects, including but not limited to real or expected risks of
3.1.8 reporting entity—any business or public agency pre-
physical damage to facilities, regulatory costs and incentives,
paring a financial statement.
and shifts in the market for products and services (including
3.2 Acronyms and Other Abbreviations:
stranded assets).
3.2.1 FASB—Financial Accounting Standards Board
3.2.2 GAAP—Generally Accepted Accounting Principles
3.2.3 SEC—Securities and Exchange Commission
1
ThisguideisunderthejurisdictionofASTMCommitteeE50onEnvironmental
Assessment, Risk Management and CorrectiveAction and is the direct responsibil-
ity of Subcommittee E50.05 on Environmental Risk Management.
4. Significance and Use
Current edition approved Aug. 1, 2016. Published September 2016. Originally
4.1 Uses—This guide is intended for use on a voluntary
approved in 2010. Last previous edition approved in 2010 as E2718–10. DOI:
10.1520/E2718–16.
basis by a reporting entity that provides disclosure in its
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or
financial statements regarding financial impacts attributed to
contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM
climate change. The degree and type of disclosure depends on
Standards volume information, refer to the standard’s Document Summary page on
the ASTM website. the scope and objective of the financial statements. This guide
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1

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This document is not an ASTM standard and is intended only to provide the user of an ASTM standard an indication of what changes have been made to the previous version. Because
it may not be technically possible to adequately depict all changes accurately, ASTM recommends that users consult prior editions as appropriate. In all cases only the current version
of the standard as published by ASTM is to be considered the official document.
Designation: E2718 − 10 E2718 − 16
Standard Guide for
1
Financial Disclosures Attributed to Climate Change
This standard is issued under the fixed designation E2718; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope
1.1 Purpose—The purpose of this guide is to provide a series of options or instructions consistent with good commercial and
customary practice for climate change-related disclosures accompanying audited and unaudited financial statements. This guide
encourages consistent and comprehensive disclosure of financial impacts attributed to climate change.
1.2 Objective—The objective of this guide is to determine the conditions warranting disclosure and the content of appropriate
disclosure.
2. Referenced Documents
2
2.1 ASTM Standards:
E2137 Guide for Estimating Monetary Costs and Liabilities for Environmental Matters
E2173 Guide for Disclosure of Environmental Liabilities
E2725 Guide for Basic Assessment and Management of Greenhouse Gases
E3032 Guide for Climate Resiliency Planning and Strategy
3. Terminology
3.1 Definitions of Terms Specific to This Standard:
3.1.1 climate change—any change in climate over time whether due to natural variability or as a result of human activity.
(Definition from the Intergovernmental Panel on Climate Change.)
3.1.2 financial impacts attributed to climate change —material financial impacts on a company’s performance, operations,
assets, and liabilities attributed to climate change effects, including but not limited to real or expected risks of physical damage
to facilities, regulatory costs and incentives, and shifts in the market for products and services. services (including stranded assets).
1
This guide is under the jurisdiction of ASTM Committee E50 on Environmental Assessment, Risk Management and Corrective Action and is the direct responsibility
of Subcommittee E50.05 on Environmental Risk Management.
Current edition approved March 15, 2010Aug. 1, 2016. Published March 2010September 2016. Originally approved in 2010. Last previous edition approved in 2010 as
E2718–10. DOI: 10.1520/E2718–10.10.1520/E2718–16.
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM Standards
volume information, refer to the standard’s Document Summary page on the ASTM website.
3.1.2.1 Discussion—
In this guide, the short form designations of ‘financial impact’ and ‘impact’ are also used to designate this specific concept.
3.1.3 financial statement(s)—include, but are not limited to, statements associated with shareholder reporting, periodic reports,
registration statements, loans, mergers, acquisitions, or divestitures. Financial statements may include statements outside of SEC
filings.
3.1.4 greenhouse gas—includes carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur
hexafluoride.
3.1.5 materiality—the significance of an item to users of a financial statement that considers all relevant and surrounding
circumstances. A material item is one that its omission or misstatement is of such a magnitude in the surrounding circumstances
that either the judgment of a reasonable person relying on the financial statement would have been changed or influenced by its
inclusion or correction, or there is a substantial likelihood that the item, after assessing the inferences, and their significance, drawn
from the given set of facts associated with the financial statement, would be viewed as significantly altering the information made
available to the investor or shareholder. (For additional information on materiality, see Guide E2173.)
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
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E2718 − 16
3.1.6 stranded assets—an asset that has become obsolete or non-performing, as is accounted for to reflect its reduced value.
3.1.7 supply chain—the sequence of processes involved in the production and distribution of a commodity, for example, raw
materials to manufactureres to customers/retail outlets.
3.1.8 reporting entity—any business or public agency preparing a financial statement.
3.2 Acronyms and Other Abbreviations:
3.2.1 FASB—Financial Accounting Standards Board
3.2.2 GAAP—Gen
...