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Climate-related Financial Disclosure

The Law Council of Australia provided a submission to the Treasury for its Climate-related financial disclosure Consultation paper.

The Law Council supports the development in Australia of an appropriate regulatory framework to require Australian business entities with exposure to financial risks arising from the transition required to mitigate the effects of climate change to disclose that risk (which is consistent with the comprehensive global baseline of sustainability disclosure standards being developed by International Sustainability Standards Board (ISSB)).

International consensus is building in the adoption of the ISSB’s standards, once ultimately determined, and in this context aligning with international reporting standards is critical to ensure the availability of capital, finance and insurance for Australian enterprises by providing investors and other stakeholders with consistent and internationally comparable information on climate-related impacts.

Further, the standards, as currently drafted, would impose obligations on an entity to report on its climate-related target by reference to targets created under the latest international agreement on climate change, currently the Paris Agreement.1 As a result, adoption of a mandatory reporting framework may similarly assist Australia to meet the emissions reductions to which it has committed under that Agreement.

In circumstances in which Australian business entities are adopting an uneven approach to climate-related financial disclosures in the context of existing guidance, the Law Council supports the development of an appropriate framework to promote certainty, clarity and transparency within affected entities.

Read the full submission below.

1 Paris Agreement, opened for signature 22 April 2016 [2016] ATS 24 (entered into force 4 November 2016) (Paris Agreement). Australia ratified the Paris Agreement on 10 November 2016: Statement by the Hon Greg Hunt MP, ‘National Statement, Signing of the Paris Climate Change Agreement’ (New York, 22 April 2016) < https://parlinfo.aph.gov.au/parlInfo/download/media/pressrel/4523504/upload_binary/4523504.pdf;fileType=ap plication%2Fpdf#search=%22media/pressrel/4523504%22>.

Last Updated on 22/11/2024

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