Businesses are expected to further disclose the financial risks they face as a result of climate change as part of a policy move being considered by the Federal Labor Party to provide more certainty for investors.
Shadow Treasurer Jim Chalmers signaled on Wednesday that Labor wanted much clearer advice from companies – including those in the financial sector – on the problems climate change could pose to their business models.
Some countries have already moved to mandatory and comprehensive reporting systems for climate change issues, including New Zealand and Great Britain.
While Australian law requires companies to report significant risks and issues, some companies are still concerned that they have not adequately reported the financial implications of climate change.
Ethical investor organizations lobbied for a mandatory disclosure system that would start with the country’s largest publicly traded companies.
Mr. Chalmers, speaking to CUTA’s Virtual Super Trustees Forum, made it clear that there will be a change in disclosure requirements regarding climate change.
âWe know that there is not much that can be done when it comes to climate risk disclosure when the existing reporting framework is insufficient, inconsistent and inadequate,â he said.
âWe agree that regulators and government should provide clearer guidance on this and what companies should report – and we will have more to say about it.
“Like the Reserve Bank, we would like to see usable, credible and comparable disclosures, so that there is a baseline, anywhere in the world, against which we can measure ourselves.”