ASIC chair Joe Longo says ESG issues are driving the biggest changes in financial reporting in a generation.Credit:AFR
Amid a boom in green finance,with fund managers around the world keen to spruik their environmental credentials,Longo said ESG was driving “the biggest changes to financial reporting and disclosure standards in a generation”.
“This is a transformational issue for global markets,and we need to be ready to meet that change at every step of its development,” Longo said in a speech to the Centre for Economic Development of Australia in Canberra.
Specifically,Longo pointed to looming global changes from the International Sustainability Standards Board,which are intended to set a baseline for sustainability-linked disclosure for capital markets. Longo said his message for firms was that they needed to be preparing for these reporting requirements,which are aimed at giving investors and markets better information on sustainability.
“These ambitious standards will require companies to adopt a systematic approach to collecting and analysing data across the company itself,and its supply chains. Preparation for that should be starting now,” Longo said.
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He said that in the next fortnight,the federal Treasury was likely to release a paper setting out the government’s plans for how the global standards on sustainability would be adopted in Australia. Longo said these standards were likely to become part of Australian law in the next 18 months,and companies had “no excuse” for not preparing now.
With financial firms keen to cash in on the surge in ESG interest,ASIC has made sustainable finance as a key priority,and it has previously launched a crackdown on “greenwashing” – where companies exaggerate or lie about their environmental credentials.