ASIC supports alignment with global sustainability reporting rules

Joe Longo, chairman of the Australian Securities and Investments Commission (ASIC), has expressed support for Australia aligning with global sustainability reporting standards.

Speaking at a conference on sustainability reporting at Deakin Law School, Longo said the industry regulator is in favor of aligning emerging Australian climate reporting rules with internationally developed rules.

ASIC’s intervention in the debate over climate reporting guidelines comes as the Australian Accounting Standards Board (AASB) and parts of the accounting profession are at odds over how reporting standards will be applied when new laws are passed by Parliament.

An AASB proposal covers only climate-related reporting, while professional bodies such as the Chartered Accountants in Australia and New Zealand and CPA Australia are in favor of aligning Australia’s global sustainability reporting rules set out by the London-based International Sustainability Standards Board.

Longo used Deakin’s presentation to support aligning Australia’s climate reporting framework with global rules.

“We are on the cusp of this possibly becoming domestic Australian law,” Longo said. “There is still a lot of work ahead of us to work out what the standards will look like in the Australian context.

“ASIC supports the alignment of Australian standards with international standards as much as possible. This is of course a matter for Parliament and the AASB, but minimizing differing climate reporting requirements between different jurisdictions would likely improve market efficiency and competitiveness for Australian businesses and reduce regulatory burden on reporting entities.”

The ASIC chairman also used his presentation to warn businesses not to wait for laws to be passed by Parliament before starting to figure out what records they need to keep.

He said there is already a cohort of listed companies reporting climate-related information, but there are entities that would be nervous about having to report in accordance with the new requirements.

“Nearly 75% of the ASX200 have committed or are already voluntarily reporting climate-related information under the (Climate Financial Disclosure) framework,” Longo said.

“The same is not necessarily true for some smaller entities. But for both smaller and larger entities there is some understandable concern because the legislation is now actually coming our way.”

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