The Business Council supports the continuous improvement in the quality of climate related financial disclosures to facilitate climate risks and opportunities when making investment decisions and is calling for close alignment with international standards.
Providing investors with a rigorous view of climate risks and opportunities as they research where to invest their capital should be the primary purpose of the Government’s draft climate related financial disclosure exposure legislation.
Business Council Chief Executive Bran Black said continuous improvement in the quality of climate related financial disclosures will be key for investment decision making in the future and is supported by BCA members.
“Investors need to be able to make informed decisions, risks and opportunities pertaining to climate are increasingly important for investors and a high-quality robust climate related financial disclosure reporting framework will be critical for future investments,” Mr Black said.
Imposing obligations and creating legal exposures under the Corporations Act requires certainty about the detailed standards that will apply.
Mr Black said close alignment of the Australian Accounting Standards Board (AASB) standards with the International Sustainability Standards Board (ISSB) standards will be critical so users can make valid comparisons across different corporations in different jurisdictions while keeping compliance costs low.
“We believe that an appropriately calibrated ‘training wheels’ approach will be key to ensuring a successful implementation of the new requirements, that serves both the users and preparers of disclosures.
“There is nothing to be gained for users or preparers of disclosures if the new requirements are poorly implemented in Australia and are not aligned to international standards,” Mr Black said.
The BCA says the commencement date should allow a minimum of 12 months from the date legislation is proclaimed or AASB standards are published (whichever is later) before compliance is required.
“This is an incredibly important reform and the BCA wants to see it in place, however the goal should be taking the time to get it right, not rushing and risking failure.”
You can read our full submission here.
