The Albanese Government will deliver reforms to ensure Australia can grasp the economic opportunities from more investment in cleaner, cheaper and more reliable energy, and manage the financial risks that climate change presents.
Today the Government is releasing a consultation paper on the development of an Australian climate risk disclosure framework.
This internationally-aligned framework will provide business and investors with the clarity and certainty they need to manage climate risks and invest in new opportunities.
It will ensure large business and financial institutions are providing more information and greater transparency on how they are responding to climate change and supporting the transition to net zero.
Australian businesses are already leaders in meeting global market and regulatory expectations for climate risk disclosures. In 2021, Australia had the 4th largest number of organisations issuing disclosures aligned with the Taskforce for Climate-related Financial Disclosures.
As more countries move towards global best practice, and as investors demand higher-quality disclosures, it’s important that Australia now establish a framework for consistent, credible, internationally-comparable disclosures.
These reporting requirements are expected to be mandatory for large entities and phased in over time. The Government also intends to apply appropriately tailored requirements to comparable Commonwealth public sector corporate entities and investment funds.
The Government will consult closely with industry, financial regulators and other stakeholders to develop an approach that is fit for purpose and ensures Australia is well positioned in global markets.
Consultation is now open and submissions will close on 17 February 2023.
The Albanese Government has also tasked Treasury with developing a comprehensive sustainable finance strategy, encompassing a range of measures to improve transparency, deepen Australia’s green finance markets, and seize opportunities presented by surging global momentum in sustainable finance.
The Government has written to the Council of Financial Regulators (the heads of the Australian Prudential Regulation Authority, the Australian Securities and Investment Commission, the Reserve Bank of Australia and the Treasury Secretary) asking for their support for our broader agenda.
The strategy will be developed in close co-ordination with these financial regulators, other Commonwealth departments and industry, and will be considered by Government in early 2023 before a period of public consultation on key measures.
The strategy will include the development of new standards or taxonomies for sustainable investment, further initiatives to reduce greenwashing and strengthen ESG labelling, and more ambitious participation in global forums to support climate and sustainable finance frameworks and investment – especially here in our part of the world.
The Government has already made progress by legislating Australia’s 2050 net zero commitment, updating our Nationally Determined Contribution to a 43 per cent reduction in emissions by 2030, and implementing a range of measures to deliver on these goals.
We’ve also made climate and sustainable finance a key priority for Commonwealth-State coordination through the regular Treasurers’ meetings.
With these commitments in place, financial markets are much better placed to make the long-term investments needed to meet these targets.
Our intention is to provide a strong foundation for clear, comparable and credible climate-related financial reporting by Australian entities that improves transparency for customers and investors and aligns with global practice.
The Albanese Government is not wasting a day in responding to the challenge of climate change and maximising the economic opportunities from investing in cleaner, cheaper and more reliable energy.
For more information on the public consultation process, visit the Treasury website.