The disclosure of climate-related financial information to investors has improved since the adoption of sustainability reporting requirements, Australian regulators said in a report on Monday.
In the report, which details the results of a review of a sample of corporate sustainability reports, the Australian Securities and Investments Commission (ASIC) said it found that the “quality, quantity, and consistency” of climate-related disclosure in the market has increased with the introduction of statutory sustainability reporting requirements — mandates that are being phased in, starting with fiscal years beginning after Jan. 1, 2025 for the largest companies.
“It appears that statutory reporting has not only resulted in heightened transparency, but also more meaningful engagement by entities with climate-related risks and opportunities,” the report said. “We saw examples of entities adapting or updating existing governance and risk management processes.”
At the same time, the ASIC said its review identified room for improvement in companies’ climate disclosures — including their “forward-looking disclosures and those underpinned by assumption or judgement, for example in aspects of strategy and metrics and targets disclosures.”
Against that backdrop, the regulator issued added guidance setting out practical considerations for firms to consider when preparing their sustainability reports.
“We expect improvements over time as more information becomes available and as entities gain more experience,” said ASIC commissioner Kate O’Rourke in a statement accompanying the report.
Additionally, the ASIC said it’s working on reforms to improve the efficiency of climate-related financial disclosures.
“We are supportive of measures that reduce regulatory burden whilst preserving core sustainability reporting requirements and will continue to engage with Treasury on these proposed reforms,” O’Rourke said.