Australian and New Zealand investors want significantly bolstered climate change risk disclosure from companies, including clear demonstration of how it is being used to inform business strategies and decisions.

A new report, encompassing the views of over 50 investors from 22 organisations with more than $1.1 trillion in collective funds under management, finds that while climate risk disclosure has become an increasing feature of corporate reporting, significant improvements are needed to make it more useful for decision-making, risk assessment, portfolio management and company engagement.

In particular, investors want the next generation of company reporting through the Taskforce for Climate-related Disclosures recommendations and other credible climate disclosure frameworks to:

  • Demonstrate board, director and executive skills and expertise in climate change
  • Report links between climate-related performance and executive remuneration
  • Demonstrate links between risks and opportunities identified and the company‚Äôs strategic and organisational response
  • Extend reporting of emissions metrics and targets to scope 3 emissions, where material
  • Report on both transition and physical risks, costs and implications
  • Provide auditing and assurance of results as it becomes more important.

The report was prepared by the Investor Group on Climate Change (IGCC) and energy and climate risk consultancy Energetics on the back of surveys and workshops with investors.

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