Govt launches consultation on climate reporting framework

The government is releasing a consultation paper on the development of an Australian climate risk disclosure framework.

In a statement today, Treasurer Jim Chalmers, said the internationally-aligned framework would ensure large business and financial institutions were providing more information and greater transparency on how they were responding to climate change and supporting the transition to net zero.

These reporting requirements were expected to be mandatory for large entities.

It would also provide businesses and investors with the clarity and certainty to manage climate risks and invest in new opportunities.

He said: “As more countries move towards global best practice, and as investors demand higher-quality disclosures, it’s important that Australia now establish a framework for consistent, credible, internationally-comparable disclosures."

The government will consult closely with industry, financial regulators and other stakeholders to develop an approach that was fit for purpose.

Consultation was open and submissions would close on 17 February 2023.

Secondly, Treasury was tasked with developing a comprehensive sustainable finance strategy, encompassing a range of measures to improve transparency, deepen Australia’s green finance markets, and seize opportunities presented by surging global momentum in sustainable finance.

The strategy would include the development of new standards or taxonomies for sustainable investment, further initiatives to reduce greenwashing and strengthen ESG labelling, and more ambitious participation in global forums to support climate and sustainable finance frameworks and investment.

It would be developed in close co-ordination with ASIC, APRA, the RBA, Treasury and other Commonwealth departments and industry, and would be considered by government in early 2023 before a period of public consultation on key measures.

Chalmers said: “With these commitments in place, financial markets are much better placed to make the long-term investments needed to meet these targets.

“Our intention is to provide a strong foundation for clear, comparable and credible climate-related financial reporting by Australian entities that improves transparency for customers and investors and aligns with global practice.

“The Albanese government is not wasting a day in responding to the challenge of climate change and maximising the economic opportunities from investing in cleaner, cheaper and more reliable energy.”

This article was originally featured on 12 December 2022 in Money Management.