Investors back climate disclosure mandate

A group of Australia's most influential finance groups overseeing $80 trillion have joined up in support for Canberra's proposed law to mandate climate disclosures.

The Treasury Law Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 also lays out a new regime to protect financial market infrastructure in the event of a crisis.

Collectively, the alliance manages over $80 trillion of assets, and encompasses 7.7 million retail shareholders, more than 900 companies, and over 80,000 directors, senior executives, accountants and other business professionals.

The bills are currently before parliament.

This comes as Queensland recently legislated emissions targets of 30% below 2005 levels by 2030, 75% below by 2035 and net zero by 2050.

The 15 signatories include the Investor Group on Climate Change, Responsible Investment Association Australasia, Australian Council of Superannuation Investors, Australian Institute of Company Directors, Australian Shareholders' Association, and Australian Sustainable Finance Institute.

The UN Principles of Responsible Investment, Financial Services Council, Business Council of Australia, Governance Institute of Australia, Institute of Public Accountants, Insurance Council of Australia, Australasian Investor Relations Association, and Property Council of Australia, also signal their support.

The Investor Group on Climate Change (IGCC) - a leading network for Australian and New Zealand investors acting on climate - leads the charge to call on super fund, specialist investors and advisory group members to back the laws.

The IGCC calls on Canberra to legislate an International Sustainability Standards Board (ISSB)-aligned and high-quality reporting framework.

The group said in a statement: "We recognise that the move towards ISSB-based aligned standards will not be easy - it is a once-in-a-generation change to corporate reporting, which will require significant investment and upskilling across the Australian market.

"It will also take time, as organisations mature their disclosure practices. We also recognise the need to manage the impact on smaller entities by carefully calibrating requirements.

"We consider that the bill strikes a sensible and pragmatic balance, including the inclusion of a transitional relief period.

"It is critical to business certainty and continued Australian competitiveness for the bill to be passed in a timely manner. We urge passage without undue delay."