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Task Force on Climate-Related Disclosures Related to Australia

Firstly, what is a Climate Risk Disclosure?

Time and again we’ve mentioned the term ‘Climate Risk’ or ‘Climate Risk Disclosure’. What does this mean? As defined by TCFD, this means to ‘Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning where such information is material. Risk Management. Disclose how the organisation identifies, assesses, and manages climate-related risks.’

In Australia, AORA, ASIC and the ASX Corporate Governance Council are the key financial regulators that guide, emphasise or address the importance of the impact of climate change and the physical risks it may have on businesses. 

 

Who has to report under TCFD?

The Task Force on Climate-related Financial Disclosures (TCFD) is likely to become well known in coming years. What began as a voluntary set of recommendations has become part of the regulatory framework in many jurisdictions, including the European Union, Singapore, Canada, Japan and South Africa. New Zealand and the United Kingdom are mandating climate risk disclosures in line with the TCFD by 2023 and 2025 respectively. This is part of the growing efforts to address global climate change thoroughly. The pressure on businesses to act on the TCFD’s recommendations will only increase with time. Source: Deloitte

Whilst not mandatory in Australia, APRA and ASIC have both cited the TCFD recommendations as being best practices for climate-related financial disclosures. The Investor Group on Climate Change (IGCC) has also called for Australia to make climate-related financial disclosures mandatory. Australian businesses who have securities under the Exchange Act will need to be across these disclosure requirements. Source: Gilbert + Tobin 2022



What are TCFD recommendations?

As cited on their website, The TCFD recommendations on climate-related financial disclosures are widely adaptable and applicable to organisations across sectors and jurisdictions. They are designed to solicit decision-useful, forward-looking information that can be included in mainstream financial filings.

The recommendations are structured around four thematic areas that represent core elements of how organisations operate: governance, strategy, risk management, and metrics and targets.

The TCFD recommendations summarised below are fully described in the TCFD recommendations report.

 

EWN Climate Risk Disclosure Services

When it comes to mitigating the impact of climate risk, the next 10 to 15 years will be critical. The Early Warning Network has a team with expertise in meteorology, climate intelligence and spatial risk, offering round-the-clock monitoring of weather risks for our clients, and our staff are ready to provide the insightful data necessary for organisations to make informed decisions about operations in this 10 to 15 year time period. 

Australia's climate and the associated risk are 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.

To discuss how we can help your business call 0493 412 013, email martin@ewn.com.au, or contact us via our enquiry page.

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