The corporate regulator has announced it is upping its engagement with listed companies and investor groups on climate change throughout 2022.
Speaking at the AICD Governance Summit on Thursday, ASIC chair Joe Longo said the corporate regulator has noted an uptick in climate-related disclosures made by domestic companies and is watching these developments closely.
Late last year, the international sustainability standards board was established to develop high-quality, global baseline climate and sustainability disclosure standards to meet investors’ information needs.
Since then, some jurisdictions, including the UK and New Zealand, have moved towards mandatory climate-related reporting for listed companies, and while this is not the case in Australia, Mr Longo said progress is being made.
“ASIC is following developments closely and continues to participate in IOSCO’s sustainable finance taskforce, alongside our peer regulators. In light of this, it is important for directors to adopt a proactive approach as developments unfold,” Mr Longo said.
“We will engage closely with listed companies and investor groups throughout 2022 as the International Sustainability Standards Board climate standards develop, and as mandatory reporting rules are introduced in other markets,” the ASIC chair said.
He noted the corporate regulator is also keeping a close eye on greenwashing, which it defines as “the potential for an entity to overrepresent the extent to which its practices are environmentally friendly, sustainable, or ethical”.
“ASIC is conducting a review to establish whether the practice and promotion of managed investment and superannuation funds that offer ‘ESG’ or ‘green’ products are actually aligned,” Mr Longo said.
Mr Longo encouraged boards to look out for any greenwashing – and to ask whether their company’s disclosure around environmental risks and opportunities, or their promotion of ESG-focused products, accurately reflects their practices in this area.
“Boards should be mindful that prohibitions in the Corporations Act on misleading and deceptive conduct, and false or misleading statements, apply in relation to financial products such as securities or interests in funds.”
