Treasury Laws Amendment Bill 2024: Climate-related financial disclosure

Climate change, the primary climate-related risk, is an existential threat facing humanity and requires a strategic and ambitious response. The desire of working people to live an enjoyable and meaningful life where they can provide for their families through well-paid, secure and safe jobs, and retire with dignity, is reliant upon a peaceful, equitable and prosperous society.  Such a society cannot exist in an unstable climate defined by extreme warming and ever-worsening natural disasters. Furthermore, the transition to net zero presents social and economic opportunities for working people as new industries emerge. These industries can offer good quality jobs with fair labour standards and deliver good returns for the institutions that invest in them. Therefore, the interests of working people are reliant upon combating such climate-related risks through the transition to renewable energy.

The ACTU welcomes the Government’s work to mandate climate-related financial disclosures. Mandatory disclosures against robust standards and a sustainable finance taxonomy will improve the ability for governments, regulators, investors, and the public to make informed decisions, encourage the management of climate-related risks and encourage the transition to a renewable energy economy.

Australian companies largely self-determine if, what and how to make disclosures, and often use their own definitions to do so. As a result, governments, investors, regulators and the public face the significant challenge of understanding and interpreting the disclosures made. The varied, and often incomplete, nature of this information can prevent meaningful decision-making, hinder effective stewardship, enable greenwashing, make it difficult to track substantive progress or make reasonable comparisons and prevent meaningful action towards the transition to net zero. In addition to improving transparency, mandatory disclosures help to improve capability and drive improvements in corporate culture and governance.

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