An ASIC report on climate risk disclosure by Australia’s listed companies has found more can be done to improve consistency in disclosure practices across listed companies, with very limited climate risk disclosure outside of the top-200 companies. Report 593 Climate risk disclosure by Australia’s listed companies.
ASIC’s findings show that listed companies disclosure practices are 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.
Amongst other recommendations, ASIC is encouraging listed companies and their directors and advisors to:
- adopt a probative and proactive approach to climate risk; and
- disclose meaningful and useful climate risk related information to investors – the voluntary framework developed by the G20 Taskforce on Climate-related Financial Disclosures can assist in this regard (https://www.fsb-tcfd.org/about/).
ASIC has noted that risk disclosure around climate change is evolving globally and has referred market participants to the Updated Hutley Opinion on Climate Change and Directors Duties released on 26 March 2019. The Updated Hutley Opinion reinforces and strengthens the findings in the original 2016 opinion and emphasises that “Company directors who consider climate change risks actively, disclose them properly and respond appropriately will reduce exposure to liability. But as time passes, the benchmark is rising.”
ASIC has noted that it is something it intends to monitor, so if you haven’t revisited your public risk disclosures recently we recommend you actively review them for new and emerging risks, in particular, climate change. Hamilton Locke and Emerson can assist you and your board through this process.
About Hamilton Locke
Hamilton Locke is a law firm specialising in complex corporate finance transactions, including mergers and acquisitions, private equity, distressed investing and special situations, capital markets and alternative financing.
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Emerson offers a full range of compliance, general counsel and company secretarial services to companies, funds and family-offices. Emerson is backed by a team of experienced lawyers at Hamilton Locke, who can provide legal advice as and when it’s needed. Emerson offers personalised bespoke services, with an efficient, technologically advanced infrastructure allowing it to create scale and greater efficiencies than other firms currently offering the same services.
