Businesses have been asked to provide feedback on draft legislation that will form Australia’s new climate risk disclosure framework.
Federal Treasurer Jim Chalmers says the reforms will give “investors and companies the transparency, clarity and certainty they need to invest in new opportunities as part of the net zero transformation”.
“The draft legislation amends the Australian Securities and Investment Commission Act 2001 and the Corporations Act 2001 (Cth) to introduce standardised, internationally-aligned reporting requirements for businesses, to ensure they are making high quality climate-related financial disclosures,” he says.
“This is an important step for improving transparency and will help investors and companies make more informed investment decisions and lay the foundation for a stronger, more robust financial system.”
The reforms are hoped to maximise the economic opportunities of cleaner, cheaper and more reliable energy and manage climate change risks.
“Our changes will establish Australia’s climate risk disclosure framework, giving investors and companies the transparency, clarity and certainty they need to invest in new opportunities as part of the net zero transformation,” the Treasurer says.
The Government has so far carried out consultation with industry, investors, academics and regulators.
Consultation for the draft legislation will close February 9.
For more information on the public consultation process, visit the Treasury website. Submissions can be made to [email protected]
Corporations ‘need sustainability accounting’
The draft legislation comes as an independent study on sustainability accounting from CCIWA Member RSM Australia found “corporations are spending too much time on sustainability marketing, when they need sustainability accounting”.
“Australia’s corporate landscape is on the brink of a transformation, with new climate-reporting standards set to reshape the way companies operate,” RSM says. “Companies must start preparing now for mandatory disclosure schemes and the transition to a net-zero economy.”
Starting on July 1, 2024, reporting entities will be required to disclose material physical risks of climate change and transition risks associated with moving towards a net-zero economy. Failure to implement robust governance frameworks for climate-risk reporting could lead to penalties for both companies and their directors.
As more companies are required to report their financial climate risks, this requirement will extend throughout the supply chain and affect the broader economy.
The report comprises:
• A comprehensive overview of Australia’s new reporting requirements for climate-related financial disclosures
• Recommendations for navigating the evolving reporting landscape, unpacking how you can actually deliver on these new requirements.
• First-of-its-kind research into corporate sustainability reporting practices covering a broad sample of 1650 companies, with a comprehensive analysis beyond ASX top 100 across public and private sector.
• Case studies from Australian companies who are already one step ahead in their climate risk mitigation and reporting compliance
Ready to start your climate change journey? Find out more at climate.cciwa.com.
