Australia is embarking on a consultation process to gather feedback on proposed climate-related financial disclosure rules in line with recommendations from the International Sustainability Standards Board (ISSB).
The consultation, open until February 17, 2023, seeks input on designing standardized requirements for disclosing climate-related financial risks and opportunities. With a focus on enhancing the quantity, quality, and comparability of disclosures, the proposed reforms aim to support Australia’s climate goals while ensuring clarity for all stakeholders.
By aligning with ISSB recommendations, Australia diverges from other jurisdictions like New Zealand and the UK, which follow Task Force on Climate-related Financial Disclosures (TCFD) guidelines. However, the consultation underscores the challenge of achieving global convergence in climate reporting standards amidst varying approaches across jurisdictions.
The move by Australia to establish mandatory climate-related reporting requirements follows similar initiatives by other jurisdictions worldwide. While the trend suggests potential for globally unified standards, achieving harmonization remains complex.
Australia’s rationale for opting for ISSB standards lies in their aim to provide standardization and comparability across climate disclosures, addressing variations observed under the TCFD approach.
As companies operating across multiple jurisdictions face the challenge of navigating different standards, achieving global convergence remains a key objective amidst evolving climate disclosure landscapes.