ASTM E2718-25

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.

1.3 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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.¹¹ This guide may exceed or be less demanding than applicable regulatory requirements, but in all cases, it is assumed that the user will comply with applicable regulations. In some cases, the reporting entity may be required to comply with regulatory requirements by more than one jurisdiction. The user should be aware that there may be contractual obligations, court decisions, or regulatory directives that may affect the use of this guide, especially from the International Accounting Standards Board (see IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information, June 2023, and IFRS S2, Climate-related Disclosures, June 2023.)

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. Where, as defined by the reporting entity, such uncertainties cannot be eliminated, the reporting entity shall identify the uncertainties. In addition, the reporting entity shall provide estimates of the risks involved regarding uncertainties and assess its potential implications on future conditions through appropriate scenarios. Assessment of financial consequences of uncertainty is typically based on the development of reasonable scenarios or ranges to recognize and address uncertainties. Uncertainties can relate to physical or transitional risks, so the type of risk and the definition of the uncertainty should be identified. While one or more climate change uncertainties may be unforeseeable for any reporting period, once recognized, subsequent reports will include any previous material exclusions. Further, a discovery of significant impediment to the reporting entities stakeholders, as and when discovered by the reporting entity, may require an interim statement.
• 4.2.1.2 Comparison with Subsequent Disclosures— Subsequent disclosures that convey different information regarding the extent or magnitude of the reporting entity’s financial impacts attributed to climate change should not be construed as indicating the initial disclosures were inappropriate. Disclosures shall be evaluated on the reasonableness of judgments and inquiries made at the time and under the circumstances in which they were made. Subsequent disclosures should not be considered valid standards to judge the appropriateness of any prior disclosure based on hindsight, new information, use of developing analytical techniques, or other factors. However, information on trends between disclosure years may be of value to a user of financial statements.
• 4.2.1.3 Not Exhaustive— Appropriate disclosure does not necessarily mean an exhaustive disclosure. There is a point at which the cost of obtaining information or the time required to gather it outweighs the usefulness of the information and, in fact, may be a material detriment to the orderly preparation of financial statements and the ability of readers to understand the information contained therein. However, all relevant and reasonably ascertainable information should be used to determine the content of appropriate financial impacts attributed to climate change.