Australia Seeks Mandatory Carbon Risk Reporting by 2021

A green political party in Australia has announced a new policy that will make carbon risk reporting mandatory for banks, insurers, super funds and the largest listed companies in 2021.

The Australian Greens, a green political party, has announced a new policy that will see the introduction of mandatory carbon risk reporting for Australia’s largest companies in 2021, including for banks and other financial sector firms.

“When APRA [the Australian Prudential Regulatory Authority] and the Reserve Bank urge us to take climate risk seriously but companies ignore their warnings, it’s time for government to act,” said member of parliament Adam Bandt.

“Australian companies are either not reporting on climate risk or not doing it very well. This is not good enough. Corporate Australia needs to fess up and explain just how prepared they are for a low emissions future.”

ASIC (Australian Securities and Investments Commission) recently found that reporting by listed companies on climate change is actually in decline, and that only half of the top 100 listed companies for whom climate change is a high risk are disclosing details of specific climate risks, the policy document notes.

> ALSO READ: Climate Change a Major Financial Risk, say APRA, ASIC (9 May 2019)

The Greens plan to task the CFR (Council of Financial Regulators) with developing carbon risk reporting standards consistent with FSB (Financial Stability Board) Task-Force on Climate-Related Financial Disclosure, or TCFD, recommendations, which are already endorsed by APRA and the RBA.

Reporting against these standards would be made voluntary in 2020-21, and mandatory from 2021-22 onwards, for large companies, including those listed on the ASX300, super funds, banks, insurers and multinationals operating in Australia.

The Greens will also also clarify director responsibilities in relation to carbon risk.

The policy is available here.

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