Cash Flow Touted as Key Tie-in for Climate Risk Disclosures

Any new accounting requirements to address climate change and other ESG risks should be tied to corporate cash flows, a former chair of the US accounting board said Friday.

Climate disclosures may not show up in financial statements today because of certain reporting thresholds and limitations baked into current accounting standards, said Leslie Seidman, who led the Financial Accounting Standards Board from 2010 to 2013. “It’s just too soon to book anything and it’s too uncertain to disclose anything in the financial statements,” she said in remarks to accounting professors in Washington.

“At what point do you start recognizing and ...