Climate risk disclosure by Australia’s listed companies (REP 593) sets out ASIC’s high-level findings and recommendations for listed companies following an ASIC review of disclosure practices in the market.
The review examined climate risk disclosures:
by 60 listed companies in the ASX 300;
in 25 recent initial public offering (IPO) prospectuses; and
across 15,000 annual reports.
Of the 60 listed companies in our ASX 300 sample, 17% identified climate risk as a material risk to their business. While most of the reviewed ASX 100 entities had considered climate risk to the company’s business to at least some extent, disclosure practices were considerably fragmented, with information provided to the market in differing forms across a wide range of means of disclosure.
In some cases, the review found climate risk disclosures to be far too general, and of limited use to investors. Outside of companies in the ASX 200, there was very limited climate risk disclosure by listed companies.
ASIC encourages listed companies and their directors and advisors to:
adopt a probative and proactive approach to emerging risks, including climate risk;
develop and maintain strong and effective corporate goverance which helps in identifying, assessing and managing risk;
consider how best to comply with the law where it requires disclosure of material risks; and
disclose meaningful and useful climate risk related information to investors – the voluntary framework developed by the Taskforce on Climate-related Financial Disclosures can assist in this regard.
Australian Securities and Investments Commission 2018. Reproduced with permission