RIAA welcomes the development of ASIC guidance for sustainability reporting as an essential step in the mandatory climate-related disclosure regime in Australia for which RIAA has long campaigned. Existing and potential investors (both institutional and retail), lenders and other creditors need high-quality, comprehensive, comparable climate-related financial disclosure to make decisions. Appropriate guidance is paramount to ensuring the intent of this mandatory disclosure regime is achieved.

RIAA broadly supports the draft guidance and has suggested additional areas for which guidance would be useful, both for its members and the broader market. For example:

• providing increased clarity on what constitutes a reasonable basis for forward-looking statements in the context of annual sustainability reports, with examples which illustrate good and substandard practice;
• supporting disclosure of climate-related financial information in other regulated disclosure documents, noting the likely materiality of this information for existing and prospective investors (institutional and retail);
• to expand the draft guidance to encompass all reporters, including circumstances relevant to investment businesses;
• more practical examples to underpin the regulatory guidance; and
• supporting users of climate statements, by preparing guides similar to New Zealand’s Financial Markets Authority.

Separately, RIAA, while appreciative of ASIC’s intention to take a proportional and pragmatic approach to regulation and enforcement of the new CFRD regime, called for further information on whether, and how, ASIC will enforce the requirements of the climate-related financial disclosure regime on entities that should report but fail to do so. In RIAA’s view, this should be the priority for regulatory activity following commencement of the regime.

RIAA thanks its members who contributed to this submission.