Government consults on ‘Climate-related financial disclosure’

At BDO, we regularly provide comments on matters pertaining to the standards or regulations for businesses in Australia. These include submissions to the Australian Accounting Standards Board (AASB) and internationally to the International Accounting Standards Board (IASB), among other areas. Recently, the Government called for views for consideration in response to its proposals on Climate-related financial disclosure.

Document Views sought Comments due to Treasury by
Climate-related financial disclosure consultation paper The Government was seeking views for consideration on the design and implementation proposal for a commitment to standardised, internationally aligned requirements for disclosure of climate related financial risks and opportunities in Australia. 17 February 2023

It’s clear the Australian Government recognises the significant risk that climate change has on our land, community and way of life. From passing the Climate Change Bill 2022, to reintroducing the safeguard mechanism in January this year, and now entering a period of consultation to ensure we develop the financial systems to hold organisations and the market accountable to the level expected by stakeholders.

Many Australian business have already recognised the importance of climate-related disclosures for access to markets, international capital, and people. According to the consultation paper, Australia even had the fourth largest number of Taskforce for Climate-related Financial Disclosure (TCFD) supporting organisations by jurisdiction in 2021.

While Australian businesses have been voluntarily engaging in climate-related disclosures, regulation has also been increasing in international jurisdictions like Europe, New Zealand and the US. The Australian Government has recognised the markets’ demands for “better quality, internationally-comparable disclosures” as well as the increasing number of multilateral regulatory bodies that are increasing their focus on the development of standardised frameworks for disclosure. With the release of the International Sustainability Standards Board’s standards expected imminently, the timing couldn’t be better for the Government to engage with businesses and investors to establish a broad sustainable finance framework to meet Australia’s needs.

What’s being considered?

The detailed paper included 19 key questions which looked at:

  • Types of organisations to be considered for mandatory reporting
  • Timing and potential implementation approach
  • International alignment
  • Current regulatory framework and potential impacts or changes
  • Frequency and location of reporting
  • Materiality considerations
  • Assurance over climate-related disclosures
  • Relevant metrics and reporting mechanisms
  • Available data and capability
  • Governance, liability and interaction with other reporting obligations.

Recent related consultations

In December 2022, the Government also called for comments on its proposal to ‘empower the AASB to deliver sustainability standards’.

Contact us

To understand more about what this means for your business, please contact Aletta Boshoff or Sherif Andrawes, National Leaders, ESG & Sustainability.