We strive to contribute to the debate that is shaping the Australian economy and welcome the opportunity to provide a submission in response to Treasury’s consultation paper Climate-related financial disclosure.
In responding to the consultation paper KPMG brings a wide-ranging level of global experience in financial reporting and the audit of financial statements, including internal controls over financial reporting; climate strategy and decarbonisation; and wider corporate and sustainability reporting. We have been providing assurance over sustainability information, including climate change risks and greenhouse gas emissions, for over two decades.
KPMG’s response seeks to answer the questions set out in the consultation paper and stresses the need for Australia to align our climate reporting requirements with the global baseline envisaged by the International Sustainability Standards Board.
KPMG considers that any phased adoption of mandatory climate financial disclosures will require a balance between capacity building and ensuring that a sufficient level of emissions in Australia are covered. Initially we recommend that large, listed entities, significant financial institutions, entities with facilities covered by the Safeguard Mechanism and entities providing critical infrastructure that are exposed to physical climate risks should be subject to the disclosure regime.
Additionally, KPMG considers that climate disclosures included in primary reports to investors should be investment grade and be subject to assurance, consistent with proposals in other jurisdictions. There may be scope to initially provide limited assurance, with a commitment to move to reasonable assurance at a future point in time. Policymakers should consider schemes like the Greenhouse and energy reporting audit framework to ensure robust independence and quality management standards.
If you would like to discuss the contents of this submission further, please do not hesitate to reach out.
