ASIC climate risk report reveals shortcomings in disclosure

An ASIC report on climate risk as disclosed by Australia’s listed companies reveals that there is plenty more to be done to get more and better data on more companies. The top 200 companies tend to do well on climate risk, but it becomes patchier down from there.

The report, Climate risk disclosure by Australia’s listed companies, has ASIC’s findings and recommendations for Australia’s listed companies. The report looks into 60 listed companies on the ASX 300, 25 recent initial public offering (IPO) prospectuses, and 15,000 annual reports.

Key findings of the report include:

  • Of the ASX 300 sample, 17 per cent identified climate risk as a material risk to their business

  • In ASX 100 entities, most had considered climate risk to the company to some extent, however disclosure practices were fragmented

  • Climate risk disclosures were found to be much too general and of limited use to investors

  • Outside of the ASX 200, there was very limited climate risk disclosure by listed companies

ASIC commissioner John Price said:

Climate change is a foreseeable risk facing many listed companies in the Australian market in a range of different industries. Directors and officers of listed companies need to understand and continually reassess existing and emerging risks (including climate risk) that may affect the company’s business – for better or for worse.

‘Climate risk disclosure practices are still evolving, not only in Australia but also globally. We intend to monitor market practice as it continues to evolve and develop in this area.

Download REP 593