$150 trillion of investors call for mandatory reporting of climate transition plans

8 September 2023
Australia’s new climate reporting rules should match global best practice by including standardised and decision-useful transition plans, according to three networks of investors who manage more than $150 trillion.

Three networks, Investor Group on Climate Change, UN-supported Principles for Responsible Investment, and Carbon Disclosure Project, have issued a joint statement saying that the current lack of standardisation and regulatory guidance means most companies’ disclosure of their plans for managing the transition to net zero is incomplete or inadequate for investor needs.

The Government recently announced they will be setting climate targets and pathways for the biggest sectors in the economy, which means that many Australian businesses will transform their operations, and will need to tell investors and other stakeholders how they’re planning to do so, and what capital support they need.

Currently, the networks note, neither investors nor governments get enough reliable information to make decisions about capital allocation, or companies’ climate risks and opportunities.

Recent analysis of 183 Australian companies reporting to CDP in 2022 shows that none of them met all the key indicators of a credible transition plan.

Global Competition and Standards

The UK and EU have already announced requirements for companies to issue robust, standards-based transition planning and reporting, with other jurisdictions expecting to follow.

The Australian government can help local businesses compete for global capital by establishing standards that build on international frameworks; the International Sustainability Standards Board (ISSB)’s baseline requirements.

This would make companies’ reporting more streamlined and efficient, while helping them stay attractive in global capital markets.

Quote from Rebecca Mikula-Wright, CEO of The Investor Group on Climate Change

“Between now and 2050, Australian businesses are going to seize all kinds of opportunities in the transformation to a low and ultimately net zero carbon economy.

“They will also need to protect themselves against a myriad of increasing climate risks, and through all that change investors can’t be flying blind.

“To help put capital to work in the right parts of the economy, investors need comparable, reliable and standards-based transition plans to be part of companies’ mandatory annual reporting.”

Download the Joint Statement

About The Investor Group on Climate Change

We are a leading network for Australian and New Zealand investors to understand and respond to the risks and opportunities of climate change.
Our members manage more than $30 trillion with beneficiaries including more than 7.5 million Australians and New Zealanders. Members include our countries’ largest superannuation and retail funds, specialist investors and advisory groups.
We are a not-for-profit and our work is funded by members’ fees and philanthropy from supporters who understand the power of capital to support climate action.

About Principles for Responsible Investment

The Principles for Responsible Investment (PRI) is the world’s leading proponent of responsible investment. Supported by the United Nations, it works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole. Launched in New York in 2006, the PRI has grown to more than 5,000 signatories, managing over US$121 trillion. For more information visit www.unpri.org.

About CDP

CDP is a not-for-profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. The world’s economy looks to CDP as the gold standard of environmental reporting with the richest and most comprehensive dataset on corporate and city action.