Bill to force big Australian companies to report on climate impacts and risks
Compulsory climate reporting for businesses will bring Australia in line with trading partners and support investment, experts say.
The largest companies and financial institutions must provide greater detail on how climate change is affecting strategy and key business decisions under the new law.
Mandatory disclosure of climate and nature-related risks will be a critical pillar of Australia’s climate response according to the Carbon Market Institute’s chief executive.
John Connor said it would provide transparency to investors, regulators and stakeholders.
Physical climate-related risks from higher global temperatures include more frequent and severe weather events, and shifts in climate patterns.
There are also transition risks associated with the market, regulatory and technological changes brought on by efforts to mitigate climate change.
Directors who fail to properly model, manage and disclose the risks could be held liable for breaching their legal duties.
Reporting will start on January 1 for Australia’s largest companies and financial institutions, with others to be phased in over time.