Australian Government rejects carbon risk disclosure proposals
The Australian Government has responded to the final report of the Senate Economics Committee's report on carbon risk disclosure, released in April last year, rejecting the most significant recommendations.
Amongst these were that it commit to the recommendations of the Financial Systems Board Task Force on Climate Related Financial Disclosure (TCFD).
The TCFD, chaired by Michael R. Bloomberg, was established by the FSB in December 2015 to develop a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders and insurance underwriters about their climate-related financial risks.
The TCFD developed four recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions. The recommendations are structured around four thematic areas: Governance; Strategy (the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning);
Risk Management (the processes used by the organisation to identify, assess and manage climate-related risks; and Metrics and Targets.
The Australian Government also rejected the proposal that the Council of Financial Regulators (CFR) develop a standard definition of 'carbon risk', and guidelines for mandatory annual public reporting of carbon risk by Australian companies.
The Senate Economics Committee report, Carbon risk: a burning issue, and the government's response are available here.