Keeping good company in the transition to a low carbon economy? An evaluation of climate risk disclosure practices in Australia

Private sector action to reduce carbon emissions and increase uptake of clean energy practices is critical to achieving the goals of the 2015 Paris Agreement and averting dangerous climate change. An important driver is disclosure of the business risks posed by climate change (including physical risks to company assets or supply chains and financial transition risks, associated with changing law and policy, markets and technology). For companies, climate risk disclosure focuses attention internally on managing risk and harnessing associated market opportunities. Disclosure is also essential to market transparency, providing external stakeholders, such as institutional investors, with the information required to manage long-term investment risks. This article canvasses legal and policy frameworks for carbon risk disclosure in Australia, and samples the disclosure practices of a group of large Australian companies. It argues that current regulations and associated practices are not fit for purpose and proposes reforms to bring Australia into line with comparable jurisdictions internationally.