With the momentum building behind sustainability disclosures around the world, in December Treasury released a consultation paper that seeks initial views for the design and implementation of standardised, internationally‑aligned requirements for disclosure of climate‑related financial risks and opportunities in Australia.
The introduction of climate and sustainability related disclosures is one of the most significant changes in the Australian corporate reporting landscape since we transitioned to International Financial Reporting Standards. Whilst it is almost certain that these disclosures will soon be required for the largest listed organisations (in line with global developments), it is the small listed entities and other smaller organisations where debate is required about the application of these disclosure requirements and this is where your opinions will really matter. In providing feedback it will useful to consider the demand for this information for your type of organisation as well as the practicality of preparing these additional disclosures including having the knowledge and resources available to implement these disclosure requirements.
The consultation seeks input on questions including:
- who climate-related disclosures should be applicable to;
- where they should be located
- what international source should those disclosures draw from;
- when they should be applicable; and
- whether they should be subject to assurance requirements.
In addition, Treasury is seeking views as to how Australia’s financial reporting bodies, including the Financial Reporting Council (FRC), Australian Accounting Standards Board (AASB) and the Australian Auditing and Assurance Standards Board (AUASB), should be structured to ensure they are appropriately positioned for the expansion of the international standard-setting priorities on climate and sustainability reporting.
Comments are due by 17 February 2023 and will form the basis of for the specific detailed proposals which will be developed for consultation later in the year. If you are interested in having further discussions on these proposals, please reach out to your Moore Australia advisor.