ASTM_E_2718_-_10.pdf

Designation:E271810Standard Guide forFinancial Disclosures Attributed to Climate Change1This standard is issued under the fixed designation E2718;the number immediately following the designation indicates the year oforiginal adoption or,in the case of revision,the year of last revision.A number in parentheses indicates the year of last reapproval.Asuperscript epsilon()indicates an editorial change since the last revision or reapproval.1.Scope1.1 PurposeThe purpose of this guide is to provide aseries of options or instructions consistent with good commer-cial and customary practice for climate change-related disclo-sures accompanying audited and unaudited financial state-ments.This guide encourages consistent and comprehensivedisclosure of financial impacts attributed to climate change.1.2 ObjectiveThe objective of this guide is to determinethe conditions warranting disclosure and the content of appro-priate disclosure.2.Referenced Documents2.1 ASTM Standards:2E2137 Guide for Estimating Monetary Costs and Liabilitiesfor Environmental MattersE2173 Guide for Disclosure of Environmental Liabilities3.Terminology3.1 Definitions of Terms Specific to This Standard:3.1.1 climate changeany change in climate over timewhether due to natural variability or as a result of humanactivity.(Definition from the Intergovernmental Panel onClimate Change.)3.1.2 financial impacts attributed to climate changematerial financial impacts on a companys performance,operations,assets,and liabilities attributed to climate changeeffects,including but not limited to real or expected risks ofphysical damage to facilities,regulatory costs and incentives,and shifts in the market for products and services.3.1.2.1 DiscussionIn this guide,the short form designa-tions of financial impact and impact are also used todesignate this specific concept.3.1.3 financial statement(s)include,but are not limited to,statements associated with shareholder reporting,periodicreports,registration statements,loans,mergers,acquisitions,ordivestitures.Financial statements may include statements out-side of SEC filings.3.1.4 greenhouse gasincludes carbon dioxide,methane,nitrous oxide,hydrofluorocarbons,perfluorocarbons,and sul-fur hexafluoride.3.1.5 materialitythe significance of an item to users of afinancial statement that considers all relevant and surroundingcircumstances.A material item is one that its omission ormisstatement is of such a magnitude in the surroundingcircumstances that either the judgment of a reasonable personrelying on the financial statement would have been changed orinfluenced by its inclusion or correction,or there is a substan-tial likelihood that the item,after assessing the inferences,andtheir significance,drawn from the given set of facts associatedwith the financial statement,would be viewed as significantlyaltering the information made available to the investor orshareholder.(For additional information on materiality,seeGuide E2173.)3.1.6 reporting entityany business or public agency pre-paring a financial statement.3.2 Acronyms and Other Abbreviations:3.2.1 FASBFinancial Accounting Standards Board3.2.2 GAAPGenerally Accepted Accounting Principles3.2.3 SECSecurities and Exchange Commission4.Significance and Use4.1 UsesThis guide is intended for use on a voluntarybasis by a reporting entity that provides disclosure in itsfinancial statements regarding financial impacts attributed toclimate change.The degree and type of disclosure depends onthe scope and objective of the financial statements.This guideis intended to apply to U.S.and international operations at thediscretion of the reporting entity.The user should be aware thatthere may be contractual obligations,court decisions,orregulatory directives that may affect the flexibility in use of thisguide.The user should also maintain an awareness of interna-tional regulations that may be relevant to disclosures,such asthose of the International Accounting Standards Board andInternational Financial Reporting Standards.4.2 Principle:1This guide is under the jurisdiction ofASTM Committee E50 on EnvironmentalAssessment,Risk Management and Corrective Action and is the direct responsibil-ity of Subcommittee E50.05 on Environmental Risk Management.Current edition approved March 15,2010.Published March 2010.DOI:10.1520/E271810.2For referenced ASTM standards,visit the ASTM website,www.astm.org,orcontact ASTM Customer Service at serviceastm.org.For Annual Book of ASTMStandards volume information,refer to the standards Document Summary page onthe ASTM website.Copyright ASTM International,100 Barr Harbor Drive,PO Box C700,West Conshohocken,PA 19428-2959.United States1 4.2.1 The following principles are an integral part of thisguide and are intended to be referred to in resolving anyambiguity or dispute regarding the interpretation of financialdisclosures regarding financial impacts attributed to climatechange.4.2.1.1 Uncertainty Not EliminatedAlthough a reportingentity,as of the time when its financia