FSC welcomes passing of ‘landmark’ climate disclosure laws

Patrick Buncsi

10 September 2024

The Financial Services Council (FSC), the peak body for Australia’s wealth management sector, has welcomed the successful passage of the Federal Government’s climate disclosure bill through Parliament today.

The bill, which amends the Corporations Act, will require large businesses to create annual sustainability reports that disclose and substantiate climate risks and opportunities.

The change is part of the Federal Government’s proposed climate-related financial disclosure (CRFD) regime, which endeavours to improve the quality and comparability of climate-related financial disclosures (between companies and across sectors), stamp out greenwashing practices, and “help investors make more informed decisions”, the Government stated in a policy brief.

Australian Securities and Investment Commission (ASIC) chair Joe Longo has described the bill as “the biggest change to corporate reporting in a generation”, with an expected 6,000 entities required to report under the new standards.

FSC chief executive Blake Briggs hailed the passage of the overarching Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill as an “important milestone for Australia as we move towards a low-carbon economy”.

“Accurate climate disclosures provide Australian investors data that will help in pricing the risk and opportunities of climate change to investment portfolios, allowing the Australian investment community to play its role in the carbon transition.

He added: “Fund managers and superannuation funds are stewards for the savings of millions of Australians and it is appropriate to set clear and transparent standards for the disclosure of the climate risks and opportunities associated with Australians’ investments.

“Having consistent reporting of climate risk across Australian companies helps ensure that investment decisions can be made in the best long-term financial interest of Australians,” Briggs said.

FSC acknowledged the Government’s “extensive consultation” with industry to develop “workable” CRDF arrangements for funds management and superannuation businesses – the primary users of this information.

The peak body said it will continue its work with the Government, ASIC and the Australian Accounting Standards Board to finalise the regulations as well as accounting and assurance standards for the CRFD.