Early preparation is key, emphasises ASIC Chair on mandatory climate reporting
ASIC Chair Joe Longo has revealed some early guidance regarding mandatory climate-related disclosures.
ASIC Chair Joe Longo has revealed some early guidance regarding the regulatory body's strategy for mandatory climate-related disclosures, underscoring the need for entities to proactively prepare for the forthcoming regulatory landscape.
Highlighting the urgency of compliance, Longo underscored the need for entities to commence preparations as soon as possible. He cautioned against delaying action until after the legislation passes, urging stakeholders to initiate the process of data gathering, capability building, and record-keeping without delay.
Early preparation is key
Addressing a gathering of industry stakeholders at the Deakin Law School International Sustainability Reporting Forum recently, Longo emphasised the necessity for entities to commence preparations early to comply with the evolving climate reporting requirements. With over 6,000 entities slated to report under the new regime in the coming years, Longo urged proactive measures in implementing requisite systems, processes, and governance practices to meet the impending obligations.
ASIC’s approach – pragmatic supervision and enforcement
Longo reassured stakeholders that ASIC would adopt a pragmatic approach to supervising and enforcing the new regime. While refraining from divulging a step-by-step roadmap, he affirmed ASIC's commitment to issuing guidance to aid entities in meeting their obligations effectively. Longo emphasised the collaborative effort between ASIC, the government, and other Council of Financial Regulators (CFR) agencies to support the implementation of the climate reporting regime.
He also stressed ASIC's support for aligning Australian standards with international benchmarks, noting the potential benefits of harmonisation for efficiency, and reducing regulatory burden.
Availability of supportive measures to assist with compliance
In tandem with the enforcement of the climate reporting regime, ASIC pledged to provide comprehensive guidance to facilitate compliance. Longo outlined plans to develop regulatory guidance, including a dedicated page on ASIC's website for climate-related financial disclosures, offering resources for both preparers and users of sustainability reports.
What does progress look like?
As part of its oversight responsibilities, ASIC committed to monitoring progress and market practices in climate-related disclosures. Longo intends to implement proactive surveillance efforts, including reviews of disclosures made by entities in financial reports, to glean insights and inform regulatory responses.
Longo acknowledged the evolving nature of the climate disclosure landscape, stressing ASIC's commitment to continuous learning and adaptation. He underscored the need for ongoing collaboration with industry stakeholders and international partners to navigate challenges and drive meaningful progress in climate reporting.
ASIC will provide further guidance as the proposed legislation moves towards becoming the law. However, Longo reiterated the need to start preparations earlier than later in his concluding remarks.
“You need to start preparing for the future, now,” he said.
You can read Longo’s full address at the ASIC website.