ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.
22-161MR ASIC encourages submissions to the International Sustainability Standards Board consultation on global baseline climate and sustainability disclosures
ASIC welcomes the significant progress toward establishing global sustainability reporting standards made by the International Sustainability Standards Board (ISSB). The ISSB has published two draft standards (Exposure Drafts) for consultation and ASIC encourages all relevant stakeholders to make a submission. Submissions are due by 29 July 2022.
ASIC’s Deputy Chair Karen Chester said, ‘The publication of the Exposure Drafts is a major step towards setting global sustainability and climate-related disclosure standards. The ISSB has worked at pace to meet the urgent demand for transparent and comparable reporting on sustainability and climate-related matters. Consistent, comparable and relevant information is critical for investors to make fully informed decisions here.
‘It’s important that Australian companies and stakeholders more broadly ̶̶ investors, other reporters, advisors and assurers ̶̶ participate in the ISSB consultation to establish these standards as ‘a global baseline’. The ISSB offers alternative consultation options, you can complete a survey or submit a comment letter. Australian stakeholder feedback is essential to ensuring the ISSB’s final standards are appropriate and workable for our market and economy.
‘Should the Exposure Drafts be adopted internationally, they will inevitably impact Australia’s capital markets and participants, as investors continue to demand comparable sustainability and climate-related corporate disclosures,’ said Ms Chester.
ASIC encourages Australian stakeholders to make a submission in response to the ISSB’s Exposure Drafts:
- S1 General Requirements for Disclosure of Sustainability-related Financial Information; and
- S2 Climate-related Disclosures
Stakeholders can submit responses on the Exposure Drafts by participating in a survey or submitting a comment letter by 29 July 2022.
Stakeholders may also make submissions to the Australian Accounting Standards Board (AASB) by 15 July 2022. The AASB is consulting on the ISSB Exposure Drafts, to provide feedback to the ISSB and gather information on how the proposals might operate in the Australian environment.
ASIC is engaging with the ISSB Exposure Drafts through its membership of the Council of Financial Regulators Climate Working Group, participation in stakeholder roundtables being conducted by the AASB and engagement with industry stakeholders. As announced on 23 June 2022, CFR agencies will provide a joint submission to the ISSB on the Exposure Drafts.
Internationally, ASIC is a member of the Sustainable Finance Taskforce of the International Organisation of Securities Commission, which provides input to the ISSB and will consider possible IOSCO endorsement of the ISSB standards.
Report 593 Climate risk disclosure by Australia’s listed companies sets out ASIC’s recommendations relating to the consideration and disclosure of climate risk.
ASIC encourages directors and senior management of listed companies and their advisors to continue reporting voluntarily under the Task Force on Climate-Related Financial Disclosures (TCFD) framework as the ISSB climate standard develops.
- Consider climate risk - directors and management of listed companies should understand and continually reassess existing and emerging risks, including climate risk
- Develop and maintain strong and effective corporate governance- strong corporate governance facilitates identifying and managing material risks
- Comply with the law – directors should consider disclosure of material business risks affecting future prospects in an operating and financial review, and
- Disclose useful information to investors –directors of listed companies with material exposure to climate risk should consider reporting voluntarily under the TCFD framework.
Directors of listed companies should also ensure that the Operating and Financial Review provides the information that investors would reasonably require on operations, financial position, business strategies and prospects for future financial years. Also see:
- Regulatory Guide 247 Effective disclosure in an operating and financial review
- ASIC media release 22-124MR ASIC highlights focus areas for 30 June 2022 reporting.
The creation of the ISSB was announced at COP 26 in November 2021, with the objective of developing high-quality global baseline climate and sustainability disclosures to meet investors’ information needs.
On 31 March 2022, the ISSB published the Exposure Drafts.
In December 2021, ASIC welcomed the establishment of the ISSB (see ASIC media release 21-349MR). ASIC recognises the establishment of the ISSB as a major step in setting global sustainability standards and addressing climate risk. ASIC is supportive of the objectives of the ISSB in developing a global baseline to support the information needs of investors.
For further information on the ISSB, see the IFRS Foundation’s website.