The Federal 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.
Announced today, the Government will release a consultation paper on the development of an Australian climate risk disclosure framework.
The reforms 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.
The new internationally-aligned framework will provide businesses and investors with the clarity and certainty they need to manage climate risks and invest in new opportunities.
Businesses in Australia are currently ahead of the rest of the world in meeting the international standards for unveiling information on climate risks.
In 2021, the nation was ranked fourth in the number of entities publishing data that adheres to the guidelines set out by the Taskforce on Climate-related Financial Disclosures.
With more countries following the same standards of excellence and investors expecting higher-quality reports, it is paramount that Australia develops a structure for consistent, reliable, and internationally-comparable disclosures.
Companies of a considerable size are anticipated to be obliged to adhere to the reporting guidelines. Furthermore, the Government is planning to impose tailored regulations to analogous Commonwealth public sector firms and investment funds.
The Government will also have detailed discussions with businesses, economic regulators and other key people to come up with a suitable plan that guarantees Australia is in a good standing in the international markets.
The Albanese Administration has also tasked Treasury Department to create a thorough sustainable finance plan, which covers a variety of actions to enhance visibility, increase Australia’s green finance sector, and capitalize on the rising global trend in sustainable finance.
Additionally, the Government will also write 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.
The plan will be established in close conjunction with financial regulatory bodies, other Commonwealth divisions, and the commercial sector, and will be evaluated by the Government before the start of public consultation on major steps in early 2023.
The strategy will involve formulating new regulations or classifications for sustainable investment, taking measures to minimize the prevalence of greenwashing and improving ESG labelling, and being more proactive in global conversations to promote climate and sustainable finance schemes and investment
The Albanese 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.
A joint media release between the Hon Chris Bowen MP Minister for Climate Change and Energy and the Hon Stephen Jones MPAssistant Treasurer Minister for Financial Services said, “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.” it said
The Albanese Goverment is not hesitating to confront the climate change issue and making the most of the economic advantages of investing in energy that is more affordable, dependable, and environmentally friendly.
Consultation is now open and submissions will close on 17 February 2023.
