The alliance will be unveiled at the Australian Institute of Company Directors inaugural climate governance forum in Sydney on Monday.
“The overarching goal should be a globally consistent, comparable, reliable, and verifiable corporate reporting system to provide all stakeholders with a clear and accurate picture of an organisation’s ability to create sustainable value over time,” they will say.
They also warn that it will be vital that global bodies such as the ISSB and other jurisdictions develop sustainability standards that work together and avoid regulatory gaps and fragmentation.
An Australian voice
While Australia is seen as a relative laggard on the creation of uniform rules, particularly compared to the European Union, the group says the global trend will give local regulators APRA, ASIC and the Reserve Bank of Australia, the benefit of adopting emerging norms without having to overturn existing domestic rules.
Getting global standards established involves detailed negotiations over common definitions, concepts, terminologies and metrics, according to the group, which was established to ensure an “Australian voice” at international discussions.
“Climate represents a first order risk to the Australian economy, the financial system and investors,” they will say.
“The group supports the Paris Agreement and its objective to take into account the needs of a just transition while achieving a net zero emissions economy and resilient Australia.”
“To avoid large-scale financial risks from a disorderly transition to net zero emissions and the physical impacts of climate change, there must be clear and comparable disclosure of sustainability-related and in particular climate-related information.”
Dr Chalmers and Energy and Climate Change Minister Chris Bowen have promised to establish “usable, credible and comparable” disclosure rules that enable investors to make informed decisions.
“Quality, standardised reporting will provide business and investors with the clarity and certainty they need to manage climate risks and invest in new opportunities,” Dr Chalmers said.
He said he would write to the ISSB to express the Australian government’s support for the draft arrangements.
“I’m now putting together a climate disclosure framework for Australia that builds off emerging international standards, and harnesses some really encouraging momentum here.”
One consequence of the push for more standardised reporting of climate risks will be a likely shortage of skills across the accounting and audit industry that will produce those assessments, the group will warn.
There will also need to be a significant shift in corporate management to embed such reporting requirements and norms.
Consultation is under way around the world on an exposure draft of regulations published by the ISSB, which was established at the UN climate summit in Glasgow last November by the International Sustainability Standards Board to unify disclosures from corporates on their sustainability performance and climate risks.
Advocates of a global set of rules have said they would not only help investors pursue sustainable assets and businesses, they would expose laggards as well.
The group’s members also include the Australian Finance Industry Association, the Australian Sustainable Finance Institute, the Australian Financial Markets Association, the Group of 100, the Institute of Public Accountants, CPA Australia, the Insurance Council of Australia, and the Investor Group on Climate Change, and Engineers Australia.