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Climate change risk associated with bonds and its consequences

As reported on Financial Review, The Commonwealth has lost an attempt to have a landmark case alleging it misled or deceived sovereign bonds investors by failing to disclose climate change risk thrown out, with a judge slamming its claims as “exaggerated” and having “little force”.

  • The claim is that, in the likely event that the consequences of climate change have material adverse impacts on the Commonwealth’s financial position, the bond market is likely to factor that into the value of [bonds] on the ASX.

  •  The claim is that there is not simply insufficient disclosure but rather that there had been “nothing at all”.

  • The goal is to push for the government to declare climate change risks associated with bonds and for it to be banned from promoting or selling them until it does so.     Financial Review

Who is responsible for deciding what climate risk information needs to be disclosed?

It is not for investors to decide what climate risk information needs to be disclosed. The onus is on the government to provide this information as it was “uniquely placed ... to assess” it.

EWN has real time climate risk data that can support any reporting required to ensure fiduciary duty is met by any organisation or business.

EWN Climate Risk Disclosure Services

Australia's climate and the associated risk is changing for businesses.  EWN's climate risk support platform provides a way for businesses to:

  • identify potential hazards,
  • quantify the future risk and
  • compare to what that risk was in the past.

Analysis is available on a wide variety of hazards and severities ensuring your climate risk disclosure report covers all aspects of your physical risk .

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You can read the full article here.

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