Australian company directors will not face increased liability risks under the incoming International Sustainability Standards Board (ISSB) reporting requirements and, therefore, should not need any kind of ‘safe harbour’.
This is according to legal advice that was sought by the Australian Council of Superannuation Investors (ASCI), Investor Group on Climate Change (IGCC) and the Responsible Investment Association Australasia (RIAA), published ahead of Australia’s new climate reporting standards, which will commence from 1 July.
The ISSB standards will likely necessitate an evolution of processes and disclosures across industries, requiring reporting on material climate risks, but corporate directors should already be considering and measuring these risks, the advice said.
“Many Australian companies are already reporting on their climate risks under the Corporations law right now,” said RIAA CEO Simon O’Connor.
“Mandatory reporting on all sustainability risks will help investors and even the playing field. This legal advice shows climate-related financial disclosures are clearly within the mandate of company directors, who need to also consider which other sustainability risks are material to their organisation.”
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