17 million super members worry about cost of climate risk
Superannuation funds have sought to persuade Treasury that they should be treated differently when it comes to climate disclosure, arguing that the process will not be simple and will come at significant cost not least from informing their members.
The superannuation funds are arguing that they should be given longer not least because it is hard to find sufficient experienced personnel and because superannuation funds sit “at the very end of the chain of disclosures in the economy”.
In a submission responding to a Treasury consultation paper on climate-related financial disclosure, the Association of Superannuation Funds of Australia (ASFA) said implementation of international disclosure standards by superannuation funds “will not be simple and, in some cases, will require significant changes to business operations and increases in associated operational costs”.
The submission argues that while incorporating the disclosures into the annual financial reports of listed companies might be appropriate, this is not the case for superannuation funds.
“ASFA encourages Treasury to consider whether an alternate method of reporting might be made available to superannuation funds to ensure their members receive this information in a more readily digestible form,” it said.
“Given their position at the end of the investment chain, the most significant challenge for superannuation funds relates to the availability and quality of the required data from third parties in order to construct meaningful and accurate Scope 3 financed emissions reporting,” the submission said.
“This adds an extra layer of complexity to the capabilities and systems required to collect, process and generate the necessary outputs required. Superannuation funds are also cognisant of the current professional skills gap, both domestically and globally, required to complete compliance, modelling and assurance in relation to the disclosures.”
Elsewhere in its submission, ASFA made the point that there are currently 17 million Australians with a superannuation account and that, anecdotally, there is a growing expectation from members that funds disclose the climate-related risks to their superannuation.
“In this regard, an optimal mechanism for disclosing risks related to financed emissions to individual fund members may not be within annual financial reports, but instead via separate reports targeted to the typical superannuation member.”
“Thus, superannuation funds, in addition to having to incorporate climate-related disclosures within their annual reports, are likely to need to produce a separate set of disclosures to ensure members can access the relevant information (in a more digestible form).”
Of course ISA, do whatever you want.
No Govt regulation ever really applies to your funds. We the Govt regulators just publish crap to kill Advisers but ISA is always exempt from anything it doesn’t want to do 🙂