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ASIC Urges Financial Firms to Prepare for Mandatory Climate Disclosure Reporting

asic climate reporting

Australian Securities and Investments Commission chief Joe Longo has emphasized to corporate Australia that delaying preparations for imminent mandatory climate disclosures, set for rollout in 2025, is “simply not an option.”

ASIC has advised locally operated and authorized companies to ready themselves for the forthcoming introduction of a mandatory climate disclosure regime.

Speaking at the Deakin Law School International Sustainability Reporting Forum, Longo stressed the importance of entities initiating the establishment of systems, processes, and governance practices to meet the new climate reporting requirements.

Over 6,000 entities, including those holding Australian Financial Services (AFS) licenses, are mandated to report under the new disclosure framework within the next few years. The phased implementation of the regime will commence from the financial year starting 1 July 2024.

“As I’ve said before, the growing interest in environmental, social, and governance (ESG) issues is driving the biggest changes to financial reporting and disclosure standards in a generation,” remarked Longo.

Acknowledging industry apprehensions regarding the potential complexity of the new reporting obligations, ASIC’s Chairman assured a pragmatic approach to supervision and enforcement in line with any new regulatory framework. The regulator intends to provide guidance to aid entities in fulfilling their new obligations.

“This is a transformative issue for global markets, and we must be prepared to navigate that change at every stage of its evolution. To achieve that, we must uphold high standards of governance and disclosure,” added Longo.

ASIC plans to collaborate with the government and other Council of Financial Regulators agencies in supporting implementation efforts, including initiatives aimed at assisting entities in meeting the new requirements, such as addressing data challenges.

Read more: FX Newsroom

Mentioning future climate action in its 4-year plan released in 2022, ASIC recently secured a landmark greenwashing case against Vanguard, which confessed to misinforming investors about ESG screens in its billion-dollar fund.

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