Greens Treasury spokesperson, Senator Peter Whish-Wilson, provides the following comments on the release of the report by the Senate Inquiry into Carbon Risk Disclosure. This inquiry was instigated by Senator Whish-Wilson in October 2016 following moves by the G20 Financial Stability Board to investigate the issue.
Senator Whish-Wilson said, “This Inquiry has shown that elements of the Australia corporate sector are trying to keep their eyes wide open when it comes to carbon risk but the Government won’t remove their blindfold.
“Carbon risk, whether from the direct climate change impacts or from uncertainty with climate policy, weighs heavily on the economy and the less information that is available the harder it is to make long-term investment decisions.
“However, seeking a ‘first mover advantage’ in carbon risk disclosure is itself a risk. Responsible corporates have indicated they will accept carbon risk disclosure requirements so long as the playing field is level. What are missing are clear, uniform and mandatory standards. It is the responsibility of government to step into the breach, to set the parameters, and to enable the collective will.
“The Chair’s report provides a good summary of this inquiry’s findings and includes some sound recommendations. However, the enormity of the problem requires a bolder approach and needs to demonstrate the preparedness of the parliament to act decisively. There is a financial imperative, an economic imperative, and, frankly, an existential imperative to act decisively and to act now,” he concluded.
The Greens have provided additional comments including eight further recommendations:
Recommendation 1: The government reintroduce a price on carbon pollution.
Recommendations 2: The government require annual public reporting by Australian companies include the price paid for carbon pollution and the associated greenhouse gas emissions, including from global operations and interests.
Recommendation 3: The government commit to bringing into effect the recommendations of the FSB Task Force on Climate Related Financial Disclosure without exception.
Recommendation 4: The Council of Financial Regulators develop a standard definition of ‘carbon risk’ for the purposes of disclosure that incorporates policy, technological, market and physical risk dimensions.
Recommendation 5: The Council of Financial Regulators develop guidelines for mandatory annual public reporting of carbon risk by Australian public companies and by proprietary companies with financially material carbon risk exposures.
Recommendation 6: Amend NGERs to include public disclosure of equity exposures above a materiality threshold.
Recommendation 7: Amend NGERS to increase Scope 3 emissions reporting and disclosure where they are a financially material component of a company’s carbon risk.
Recommendation 8: Require industry and financial regulators to develop guidelines for stress testing scenarios for different levels of global warming.