The report, Climate risk disclosure by Australia’s listed companies, sets out ASIC’s high-level findings and recommendations for listed companies.
The report found more can be done to improve consistency in disclosure practices across listed companies, with very limited climate risk disclosure outside of the ASX 200 companies.
Of 60 listed companies in the ASX 300 sample, 17 per cent identified climate risk as a material risk, while most ASX 100 entities had considered climate risk to the company’s business.
The review found climate risk disclosures to be far too general and of limited use to investors. Outside of ASX 200 companies, there was very limited climate risk disclosure.
ASIC commissioner John Price said ASIC recommends that companies adopt a probative and proactive approach to emerging risks and develop strong and effective governance.
“Climate change is a foreseeable risk facing many listed companies in the Australian market in a range of different industries. Directors and officers of listed companies need to understand and continually reassess existing and emerging risks (including climate risk) that may affect the company’s business – for better or for worse,” Mr Price said.
The commissioner also said that climate risk was still evolving, and ASIC would continue to monitor developments.
“Climate risk disclosure practices are still evolving, not only in Australia but also globally. We intend to monitor market practice as it continues to evolve and develop in this area,” he said.
