'Once-in-a-generation' change in corporate reporting

Under the new laws company directors would have to prepare an annual sustainability report.

After pushing for a delay, one of Australia’s leading business organisations has joined a call for the rapid passage of laws on compulsory reporting of climate risks.

The Business Council of Australia on Monday joined a coalition of influential investors, senior executives, accountants and superannuation funds to support the passage of the climate reporting bill.

Together, the grouping represents investors with more than $80 trillion of assets under management, 7.7 million retail shareholders, more than 900 companies and over 80,000 directors.

In a joint statement, they called for parliament to swiftly pass the bill to usher in the “once-in-a-generation” change to corporate reporting.

Treasurer Jim Chalmers has already responded to Business Council pressure to delay the proposed start to mandatory climate disclosure until 2025.

Initially slated to begin on July 1, reporting requirements are set to begin on January 1 for Australia’s largest companies and financial institutions.

Directors will need to prepare a sustainability report each financial year that includes a climate statement.

The changes come as regulation tightens internationally to protect consumers and investors from so-called greenwashing or false claims of high environmental standards.

The new laws are also intended to provide a better picture of how climate change is being managed across the economy, and allow investors to make accurate long-term bets on assets and industries.

But Australia’s accountancy bodies have warned smaller firms and many charities are not ready and will face “costly and onerous” requirements.

The bill has been referred to a Senate committee for inquiry and must report back by April 30. The next public hearing is scheduled for Tuesday.

SIGNATORIES AGAINST “UNDUE DELAY”:

* Australian Council of Superannuation Investors

* Australian Institute of Company Directors

* Australian Shareholders’ Association

* Australian Sustainable Finance Institute

* Australasian Investor Relations Association

* Business Council of Australia

* Financial Services Council

* Governance Institute of Australia

* Group 100 CFOs

* Institute of Public Accountants

* Insurance Council of Australia

* Investor Group on Climate Change

* Responsible Investment Association Australasia

* Property Council of Australia

* UN Principles of Responsible Investment.