Investors pushing for climate change risk disclosure

Investors’ interest in real and meaningful climate change risk disclosure is growing, according to Australian Securities and Investments Commission (ASIC) Commissioners, Sean Hughes and Cathie Armour.

The two Commissioners said in addresses at the Australian National University Climate Update over the last month that more large-scale investors had been pushing for disclosures of the high standard recommended by the Taskforce on Climate-Related Financial Disclosures (TCFD).

BlackRock, for example, called for companies to report climate risk in line with TCFD recommendations, and the Australian Shareholders Association told the Australian Stock Exchange that listed companies with material exposure to climate risk should report under the framework.

The Australian Council for Superannuation Investors had been calling for greater levels of climate risk disclosure for some time, noting that it was a particularly relevant risk for its members given their long-term investment focus.

The International Organisation of Securities Regulators, of which ASIC was a member, last month reported that investors’ interest in environmental, social and governance (ESG) disclosure was growing.

“We expect that investors will continue to increase their focus on climate-related matters including in particular the climate risk exposure of the companies in which they are invested, including the company’s approach to and strategies for management of those risks,” Hughes and Armour said.

They both noted that ASIC representatives had attended a number of AGMs recently and had observed strong levels of shareholder interest in the topic, most noticeably in questions from the floow.