With new climate-related financial disclosure requirements set to take effect, the Australian Securities and Investments Commission (ASIC) is proposing new compliance guidance.
Large companies and financial institutions in Australia will face new annual sustainability reporting demands starting in 2025.
Ahead of the new regime coming into force, the ASIC — which is responsible for overseeing and enforcing compliance with the new requirements — is seeking feedback on draft guidance for complying, including the contents of annual sustainability reports, and on making climate-related disclosures outside of these reports.
“Our focus is on ensuring users are provided with high-quality, decision-useful, climate-related financial disclosures that comply with the law and the sustainability standards,” the regulator said in a consultation paper that details its proposed guidance.
Those new standards are designed to, “improve the quality, consistency and comparability” of these disclosures to help investors make more-informed investing decisions, it noted.
“We want industry to engage with our draft guidance and what we are proposing. Their feedback will help us to ensure that we can effectively support the implementation of the sustainability reporting regime,” said ASIC commissioner, Kate O’Rourke, in a release.
“We recognize that there will be a period of transition whilst entities build their capability, as reflected in the phasing in of requirements and modified liability provisions. During this transition period, we will take a proportionate and pragmatic approach to supervision and enforcement,” she said.
The deadline for providing feedback on the ASIC’s proposed guidance is Dec. 19.
Mandatory climate reporting requirements are being phased in over the next three years in Australia, starting in 2025, with the second and third waves taking effect for financial years starting in mid-2026 and mid-2027.
In Canada, mandatory climate reporting remains a work in progress, with the Canadian Sustainability Standards Board planning to release its final standards in December.
Those standards would then still have to go through the typical regulatory rulemaking process before they could be mandated by securities regulators.