ASIC urges climate details
ASIC says Australian companies should do more to disclose risks posed by climate change.
The regulator says most ASX 100 companies consider the potential risks posed by climate change, but the practice of disclosing these risks to investors is “considerably fragmented, with information provided to the market in differing forms across a wide range of means of disclosure”.
ASIC has published a report on climate risk disclosures by 60 companies in the ASX 300, in 25 recent initial public offering (IPO) prospectuses, and across 15,000 annual reports.
Of these 60 companies, about 17 per cent identified climate change as a material risk to their business.
The percentage of annual reports of all listed companies that contained climate change-related content fell fallen from 22 per cent in 2011 to 14 per cent in 2017.
“Climate change is a foreseeable risk facing many listed companies in the Australian market in a range of different industries,” ASIC commissioner John Price said.
“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.”
Some analysts say Australia’s generic risk disclosure laws for companies should apply to climate change.
“There’s a difference between what ASIC says the laws say and what companies are doing,” said Will van de Pol from Market Forces.
“It’s clear from this report and our financial research that many Australian companies are not meeting their legal requirements.
“It means that investors are being left in the dark about the risk to the companies that they own from climate change.”