Submissions

Australia

ASIC consultation on sustainability reporting

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RIAA broadly supports the draft guidance and has suggested additional areas for which guidance would be useful, both for its members and the broader market.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• to expand the draft guidance to encompass all reporters, including circumstances relevant to investment businesses;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.

Australia

Australian Sustainable Finance Taxonomy – Second Public Consultation

RIAA continues to be a strong champion of the development of the Australian Sustainable Finance Taxonomy, one of the key recommendations of the industry-led Australian Sustainable Finance Roadmap (2020), coordinated through RIAA. The Taxonomy will be a critical piece of the Australian regulatory framework to enable Australia’s sustainable finance sector to grow and make real contributions to achieving Australia’s net-zero ambitions. As such, getting the foundational settings correct is crucial.

RIAA’s submissions were informed by member input as well as through our Working Groups. Recommendations were made to further enhance the Do No Significant Harm and Minimum Social Safeguards frameworks, leveraging existing frameworks such as RIAA toolkits and Dhawura Ngilan Initiative. In addition, RIAA sought further clarification around activities which contribute to lowering emissions versus those activities that may naturally be low-emitting, and on use cases for the Taxonomy.

New Zealand   

Proposed transitional changes to NZ climate-reporting regime

RIAA welcomes the New Zealand External Reporting Body’s (XRB) continued engagement with the corporate and financial sector to ensure the success of the climate-related disclosure (CRD) regime. RIAA’s submissions focused on the multiple benefits of mandatory reporting regimes, not just in providing valuable and consistent information to investor and the market, but also in progressing skills and capability within organisations as they get ready to meet reporting obligations. This development results in stronger and more resilient business overall, a benefit to the economy. In addition, the ability to attract global capital relies on certain information being provided. RIAA supported international interoperability and alignment where changes are made to the CRD regime, including making all efforts to increase alignment to the ISSB standards.

For example, on Scope 3 reporting, RIAA submitted that foregoing Scope 3 reporting altogether was less preferable than supporting climate-reporting entitles (CRE) through, for example, relief for audit and assurance of the information. Further, for both Scope 3 reporting as well as the other suggested transitional changes, RIAA considers the XRB should promptly provide guidance or a framework for CREs and to work with industry to develop guidance that both upholds the underlying objectives of NZ CS 1 and the CRD regime more broadly, whilst addressing the regulatory and guidance concerns of industry.

Australia  

Future Made in Australia Investor Front Door

New Zealand  

FMA Consultation on proposed guidance on references to climate statements in disclosure documents

RIAA welcomes the FMA providing guidance on how climate statements should be referred to in disclosure documents, recognising that the climate-related disclosure (CRD) regime and the information in climate statements are likely to be material information that may influence an investor’s decision making.

RIAA made suggestions to improve the guidance to better reflect this materiality, particularly:

– for offers under initial public offerings;
– at the early stage of the CRD regime, where there is likely to be a broad variance to the quality of disclosure in the climate statements, outside of any question of compliance; and
– for aspects of the CRD regime which overlap with the content requirements of disclosure documents.

New Zealand  

Submission: New Zealand’s second emissions reduction plan (2026–30): Discussion document

RIAA commented on the New Zealand Government’s second emissions reduction plan, agreeing that it is vital for New Zealand to develop a clear strategy that will be a key driver for investment to transition the country’s economy to net-zero by 2050.

RIAA notes that to foster a stable investment climate, it is crucial for governments to provide policy certainty that reassures financial markets and institutional investors of predictable and consistent regulatory frameworks. Investors require policy and regulatory certainty to inform their investment decision making, which are largely based on an assessment of risk. Where long-term investments are being considered, the impact of uncertainty on decision making is more pronounced. On this basis, RIAA provides general submissions on the approach taken by the New Zealand Government in the proposed second emissions reduction plan, recommending additional clarity and certainty be provided. Submissions on scaling private investment in climate mitigation was made with the benefit of the submission by Centre for Sustainable Finance: Toitū Tahua (CSF), endorsed by RIAA.

RIAA welcomes the commitment by the Government to partner with the CSF for developing the taxonomy and sustainable finance strategy. RIAA works closely with CSF and will continue to do so, sharing its experience in establishing the Australian Sustainable Finance Initiative and our work with the Australian Government on Australia’s sustainable finance taxonomy and sustainable finance strategy. Alongside this partnership with CSF, RIAA looks forward to supporting the New Zealand Government to develop an industry-supported, globally-aligned product labelling framework, informed by its experience operating the Responsible Investment Certification Program.

Australia  

Submission: Sustainability collaborations and Australian competition law

RIAA welcomes the ACCC consultation into draft guidance to clarify how the Australian competition law interacted with collaborations related to sustainability. RIAA submitted that the draft guidance would be improved by using ‘sustainability’ over ‘environmental’ as the focus of the guidance, to provide guidance and examples for institutional investors and to consider aligning with international developments on competition regulation, including with respect to class exemptions.

Australia  

Submission: Australian Sustainable Finance Institute (ASFI) Taxonomy Public Consultation

The Responsible Investment Association Australasia (RIAA) warmly welcomes the development of the Australian Taxonomy and is pleased to see the project reach this important milestone, and the strong support from the Australian Government for this important project. RIAA is pleased to see the implementation of this key recommendation of the Australian Sustainable Finance Roadmap (2020). Implementation of the Roadmap recommendations overall should continue to be a strong focus for the sector and the Government.

In line with the taxonomy’s core principle of usability, RIAA supports the taxonomy being as simple as possible to ensure that it drives finance to where it is most needed, avoids unintended consequences, and encourages the activities that will have the most impact in support of climate change mitigation.

Australia  

Submission: Australia’s new Nature Positive laws

RIAA supports the Government’s Nature Positive Plan initiative that recognises the importance of robust environmental law reforms for protecting Australia’s biodiversity. RIAA has commented on relevant outcomes in Nature Positive Plan and recommends the Government:

– Provide investor and project proponents with more certainty and consistency as it progresses through the crafting of these laws and policies.

– Implement comprehensive programs to synchronise these initiatives to maximise effectiveness of the reforms.

– Establish clear environmental objectives to identify current loopholes and misalignments within the regulatory system and to inform necessary additional reforms.

Australia  

Submission: Assurance over climate and other sustainability information consultation paper

RIAA supports the Auditing and Assurance Board (AUASB) on progressing the development of assurance standards for climate and other sustainability information. Audit and assurance provide important ‘checks and balances’ by suitably qualified experts, and the assurance process is key to the credibility of any mandatory disclosure regime.

RIAA’s submission supports a pragmatic approach to assurance, taking into account the existing state of data and capability deficit. RIAA’s contribution to this consultation comprises the written submission with high-level comments, informed by the contribution of the RIAA Policy Technical Expert Group, as well as a meeting with AUASB and members of the RIAA Policy Technical Expert Group for direct engagement.

New Zealand 

Submission: Proposed class exemption for certain green, social, sustainability, and sustainability-linked (GSSS) bonds

RIAA welcomed the FMA providing a class exemption for certain green, social, sustainability, and sustainability-linked (GSSS) bonds. which acknowledges the increasing retail investor interest in responsible investing, as well as the role that the debt market can play in the transition.

Australia

Submission: National Adaptation Plan

RIAA commends the Government’s National Adaptation Plan, built on the first ever National Climate Risk Assessment. RIAA supports the objectives, particularly its acknowledgment of the private sector’s role in climate adaptation and resilience, and the need for increased climate resilience investments.

Australia

Submission: Annual Superannuation Performance Test – Design Options

RIAA supports the Government reviewing the framework of the performance test and welcomes the breadth of consultation undertaken. Whilst RIAA supports the use of a performance test to help safeguard the retirement savings of Australians, RIAA agrees with the Government that the current performance test has had the desired effect to remove underperforming funds. However, it has also had unintended consequences which has disincentivised the superannuation sector from long-term decision-making, taking advantage of investment opportunities in new and emerging sectors and being able to adapt to a changing future: one where a focus on decarbonisation and transitioning to a net-zero economy is crucial. The proposed review of the performance test aligns with RIAA’s position that a whole-of-government approach to sustainable finance is required.

Responsible investment approaches as a whole have been shown to lead to improved risk/return outcomes. There are a number of super funds which implement market-leading approaches to responsible investment through default MySuper products and pass the current performance test, including organisations that have been named as Responsible Investment Leaders by RIAA. There are also a number of different views across industry regarding the appropriate approach (if any) to amending or replacing the performance test, including among RIAA’s 500-strong member base. However, through wide consultation and engagement with funds that pursue different strategies and approaches, and considering the importance of a joined-up policy response to both the climate change crisis and transitioning the Australian economy to net-zero, as well as RIAA’s mission, RIAA is of the view that the current performance test to constitute a regulatory barrier which is, at present, disincentivising the superannuation sector to invest outside of a limited universe that tracks carbon intensive benchmarks.

RIAA has:
• recommended the Government establish an independent multi-disciplinary oversight body (of industry and technical experts) to ensure the ongoing relevance of the performance test and that it remains fit-for-purpose into the future;
• a set of key principles to guide the selection of a new test; and
• commented on the design options set out in the consultation paper.

Australia

Letter: Consultation on clarifying consultation requirements for offshore oil and gas storage regulatory approvals

RIAA wrote to the Department of Industry, Science and Resources to draw their attention to RIAA’s submission on the First Nations Clean Energy Strategy which sets out a number of relevant considerations for this consultation.

Australia

Submission: AASB Sustainability Reporting Standards Exposure Draft

RIAA commends the AASB in bringing together the first Australian sustainability reporting standards, as it does the Australian Government in embarking on this path. Coupled with the forthcoming legislation mandating climate-related financial disclosure, robust and globally aligned disclosure standards are crucial for positioning Australia’s economy in the current global climate.

However, RIAA is concerned about the extent to which the Draft Standards:

– depart from the global baseline set by the International Sustainability Standards Board (ISSB), which threatens the international alignment and interoperability of the disclosure; and
– narrow the application to climate only, when a number of significant markets are fast developing sustainability reporting outside of climate.

In its submission, RIAA has made a number of recommendations to address these concerns and support the development of sustainability reporting standards which reflect the ambition of the Australian Government and industry.

New Zealand

Submission: FMA Consultation – Fair Outcomes for Consumers and Markets

RIAA welcomes the FMA providing insight into its approach to regulation and focus on demonstrating good conduct. The 7 outcomes proposed by the FMA encourages a focus away from a culture of compliance to a focus on how all areas of an organisation function effectively to deliver the outcomes within the individual context of each business.

To further assist industry, RIAA recommends the FMA:

– explain the metrics which may be used to measure whether each of the 7 outcomes have been achieved, noting that outcomes-focused regulation does not change the laws and consequences attached to conduct;

– include references and examples relating to sustainability, in recognition of consumers’ increasing focus on investing their money responsibly; and

– ensure consumers have consistent and comparable information regarding financial products, through supporting a product labelling regime in NZ, anchored to the industry standard set by RIAA’s Responsible Investment Certification Program.

Australia

RIAA Submission: First Nations Clean Energy Strategy

RIAA welcomes the First Nations Clean Energy Strategy (the Strategy) as a statement of collaboration and direction for the Australian Government in its transition to a net-zero economy.

RIAA has made a number of recommendations. Crucially among these is the call to Government to legislate the United Nations Declaration of the Rights of Indigenous Peoples (UNDRIP) principles without delay, including a clear definition of free and prior informed consent (FPIC), as well as developing a National Action Plan for implementation.

RIAA’s submission has the benefit of input from our First Nations Peoples’ Rights Working Group which is already aligned with the objectives of the Strategy. Specifically, the Working Group has supported the realisation of Goal 4 of the Strategy: Government and industry create opportunities to build deeper collaboration, consensus, and new ways of working with First Nations peoples, through the development of:

– the Investor Toolkit: An Investor Focus on Indigenous Peoples’ Rights and Cultural Heritage Protection; and

– the soon-to-be-released Dhawura Ngilan Guide for Businesses and Investors, developed through the Dhawura Ngilan Business and Investor Initiative.

Australia

RIAA Submission: Climate-related financial disclosure: exposure draft legislation

Summary

RIAA welcomes the significant milestone achieved by the Australian Government through the release of the exposure draft legislation for climate-related financial disclosure, having long-been a fervent advocate of such a regime in Australia. Mandatory climate disclosure will send a strong signal that Australia acknowledges the significance of accurate and useable sustainability information in markets. This will in turn attract capital to Australia and is critical for the continued competitiveness of key Australian industries.

Noting that this consultation occurred during the consultation for the Exposure Draft of the Australian Sustainability Reporting Standards (ASRS Exposure Draft) by the Australian Accounting Standards Board (AASB), RIAA is concerned that when, read together with the ASRS Exposure Draft, the legislation as drafted may not be sufficient to give effect to the intent of the policy. In particular, RIAA is concerned that the exposure draft legislation falls short of achieving international alignment and interoperability to support Australian investors.

In this submission, RIAA has made a number of recommendations to support the success of Australia’s mandatory climate-related financial disclosure regime. RIAA is not recommending that the suggested amendments hold up the commencement of the legislation. It is vitally important the Exposure Draft Legislation is enacted without delay.

Australia

RIAA Submission: Climate Active Program

Summary

RIAA wrote to Climate Active, a program of the Australian Government, in support of the proposed update to the program which looks to lift its ambition in driving voluntary climate action, which includes reducing the reliance on offsets to meet objectives.

Australia

RIAA Submission: Draft Sustainable Finance Strategy

Summary

RIAA strongly welcomes the Government’s efforts to create a Sustainable Finance Strategy as a pivotal milestone in Australia’s trajectory to net-zero, providing the opportunity to align with global trading partners in transitioning to a sustainable finance framework.

In RIAA’s view, the key priorities are to:

– integrate First Nations’ voices and knowledge into policy responses from Day 1.

– ensure initiatives such as disclosures and the sustainable finance taxonomy are broadened to encompass non-climate sustainability goals;

– ensure existing industry efforts are incorporated into the proposed product labelling regime;

– remove barriers and deterrents to responsible investment, in particular, the Your Future, Your Super (YFYS) performance test which currently acts as a disincentive to long-term sustainable investment;

– expand portfolio holdings disclosure requirements to managed funds, and to require granular details of holdings; and

– establish an advisory body made up of industry representatives to help track progress of the Strategy.

Global

Joint Australian bodies submission to the International Sustainability Standards Board (ISSB) request for information consultation on agenda priorities September 2023

Summary

RIAA and a coalition that represents the voice of 15 peak professional, industry and investor bodies co-signed this submission. This coalition considers ‘clear, transparent, comprehensive and comparable disclosure of sustainability-related information to be part of the foundation of a well-functioning global financial system’.

As a result, the coalition expresses it support for prioritising capacity building and the effective implementation of IFRS S1 and IFRS S2 and supports the strategic direction of ISSB activities in coordination with existing and developing frameworks.

Australia

RIAA Submission: Legislating the objective of superannuation

Summary

RIAA is broadly supportive of the Government’s objective of superannuation ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.’

In RIAA’s view:

– Responsible investment approaches which focus on long-term returns and mitigating environmental, social and economy-wide risks are central to a sustainable superannuation system. We see areas for potential strengthening for a more fulsome definition of this term that equally reflects the consideration of external sustainability challenges – such as climate change – that risk having outsized impacts on the quality of retirement for Australians.
– Any other policy measures that conflict with this definition are rectified, including the Your Future, Your Super performance test which has the potential to directly inhibit the way superannuation funds can contribute to preserve savings.

Australia

RIAA Submission: International Sustainability Standards Board request for information consultation on agenda priorities September 2023

Summary

RIAA is pleased to make a submission to the International Sustainability Standards Board (ISSB) on the Request of Information Consultation on Agenda Priorities (agenda consultation) which will shape the next two-year work plan of the ISSB.

RIAA makes the following recommendation to the ISSB’s agenda priorities:

– build on IFRS S1 and IFRS S2 to ensure a rapid adoption and uptake of these standards.

– maintain the momentum allowing for the next big ESG disclosures issues to be incorporated in future.

– build future research and standards around important issues to investors such as nature, a just transition, and human rights related risks.

– continue advancing the development of a more inclusive approach to materiality, with emphasis on ultimately adopting a double materiality approach.

Australia

RIAA Submission: Climate-related financial disclosure Consultation paper June 2023 (Design consultation)

Summary

RIAA has long called for mandatory sustainability disclosures, and we are pleased to see the Australian Government moving down this path, on the heels of Aotearoa New Zealand’s already mandatory climate disclosures regime.

We’re pleased to provide a submission to Australian Treasury’s second consultation paper, and look forward to the introduction of mandatory reporting in FY 24-25. It will be important to leave the door open to disclosures on other sustainability issues going forward.

Australia

RIAA Submission: Exposure Draft: Superannuation Industry (Supervision) Amendment (Your Future, Your Super— Addressing Underperformance in Superannuation) Regulations 2023

Summary

RIAA has commented on proposed changes to the Your Future Your Super performance test, including a longer timeframe and additional indices in the benchmark.

In RIAA’s view, further reform to the YFYS performance test is needed to ensure:

– superannuation funds can meet growing consumer demand for values-based products,

– the performance test benchmark, in particular the underlying indices, is not deterring funds from directing capital to assets which will meet global commitments such as the Paris Agreement goals and Sustainable Development Goals, and

– the performance test is not misaligned with other policy objectives and regulators’ expectations.

Australia

RIAA Submission: Legislating the objective of superannuation

Summary

RIAA supports the Government’s proposal for a legislated objective of super being ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.’

In RIAA’s view:

– The definition of ‘sustainable’ should support responsible investment strategies over long-term time horizons,

– The objective should align with national and global sustainability goals, and

– Existing obligations for super funds, including the Your Future, Your Super performance test, should align with the objective.

Australia

RIAA Submission: APRA SPG 530 Investment Governance

Summary

RIAA welcomes APRA’s renewed expectations of super funds in prudential guidance SPG 530 Investment Governance.

We make the following recommendations to further strengthen and clarify draft SPG 530:

1. Clarify ESG terminology in line with global norms: Define key ESG-related terms and use this terminology consistently.
2. Relocate guidance on ‘Additional ESG impacts’: Include the guidance on impact investing and stewardship within the section on ‘Formulating the investment strategy’.
3. Clarify stewardship guidance: Define ‘stewardship’ and substitute principles-based guidance linking stewardship to superannuation funds’ best financial interests duty to members.

New Zealand

RIAA submission: Assurance over climate-related disclosures

Summary

RIAA welcomes the Aotearoa New Zealand Government’s proposal to professionalise and expand the assurance of climate statements. These measures should improve the integrity of climate reporting and build investor trust and confidence in corporate climate information.

RIAA supports:

– direct regulation of sustainability assurance providers by the Financial Markets Authority,
– including suitably-qualified non-accountant assurance providers, as appropriate, and
– expanding assurance requirements to cover the whole of climate statements.

Australia

RIAA submission: Climate-related disclosures

Summary

Treasury consulted on a proposal to mandate climate-related disclosures in Australia. In RIAA’s view, the key priorities for the new disclosures regime should be:

– alignment with the International Sustainability Standards Board (ISSB), and adapting to Australia with a building-block approach,

– a fit-for purpose regulatory framework that can be expanded to incorporate broader sustainability disclosures,

– Government support for companies under the mandatory regime, including:

 – prompt introduction, with targeted, time-bound transitional arrangements to address key challenges for preparers and audit/assurance providers,

 – support from government including free, fit-for-purpose data access, and climate scenarios, and

 – practical regulatory guidance on aspects of disclosures that present challenges.

Australia

RIAA submission: Empowering the AASB to deliver sustainability standards

Summary

RIAA commented on Australian Treasury proposals to empower the Australian Accounting Standards Board to make non-mandatory sustainability disclosure standards.

RIAA supported this important foundation for sustainability reporting in Australia. In RIAA’s view, this good first step could be strengthened through:

– a standalone governance body for sustainability disclosure standards

– strong standard-setting and public consultation requirements

– diverse sustainability expertise on the AASB, Auditing and Assurance Standards Board and Financial Reporting Council, beyond climate expertise

– maximum adherence to the standard-making framework and minimal differences between standards for different types of entities.

Australia

RIAA submission: Review of Australia’s Modern Slavery Act 2018

Summary

RIAA welcomes the opportunity to provide this submission to the review of Australia’s Modern Slavery Act 2018 (MSA), sharing RIAA’s views and several recommendations. Responsible investors are committed to assessing and respecting human rights and mitigating human rights risks in their investments, in line with international agreements and community expectations. The MSA is an important means of providing a level of public transparency and accountability that enables investors to gauge their investee companies’ commitment to and effectiveness at combatting modern slavery. It enables investors better to assess the risks that may be present in that company, and across the entire portfolio of the investment organisation.

Australia

Joint submission: Review of Australia’s Modern Slavery Act 2018

Summary

Australia

Submission: Review of Your Future, Your Super Measures

Summary

New Zealand

Submission: Aotearoa New Zealand Climate-related disclosures: Final consultation

Summary

Australia

Submission: Superannuation Performance Test Treatment of Faith-based Products – Regulations 

Summary

New Zealand

Submission: NZX Corporate Governance Code review

Summary

Australia

Submission in response to the consultation on a legislative response to Modern Slavery and Worker Exploitation, Forced Labour, People Trafficking and Slavery

Summary

Australia

Submission: Superannuation Performance Test Treatment of Faith-based Products

Summary

Australia

Summary

Global

Submission to the Draft IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information

Summary

Global

Submission to the Draft IFRS S2 – Climate-related Disclosures

Summary

Global

Joint Australian bodies submission to the International Sustainability Standards Board’s draft standards

Summary

Australia

Submission in response to the Senate Inquiry on the Application of the United Nations Declaration on the Rights of Indigenous Peoples in Australia

Summary

Australia

Aboriginal Cultural Heritage Act 2021 co-design process

Summary

New Zealand

External Reporting Board – Aotearoa New Zealand Climate Standard 1: Strategy and Metrics and Targets

Summary

Australia

Submission for the Inquiry into and Report on Best Practice Indigenous Engagement by Corporations

Summary

New Zealand

External Reporting Board – Aotearoa New Zealand Climate Standard 1: Governance and Risk Management

Summary

New Zealand

Ministry for the Environment Emissions Reduction Plan

Summary

Global

CFA Institute – ESG Disclosure Standards for Investment Products

Summary

Australia

APRA Draft Prudential Practice Guide CPG 229 Climate Change Financial Risks 

Summary

Australia

Inquiry into the prudential regulation of investment in Australia’s export industries

Summary

New Zealand

Climate Change Commission’s draft recommendations to Government

Summary

Australia

Your Future Your Super Fiduciary duty – draft exposure bill

Summary

New Zealand

FMA Proposed guidance on advertising offers of financial products under the Financial Markets Conduct Act 2013

Summary

Australia

Climate Change (National Framework for Adaptation and Mitigation) Bill 2020 and the Climate Change (National Framework for Adaptation and Mitigation) (Consequential and Transitional Provisions) Bill 2020

Summary

Australia

Submission in response to the Interim Voice Co-Design Report

Summary

The co-design task follows the recommendation of the 2018 Joint Select Committee on Constitutional Recognition relating to Aboriginal and Torres Strait Islander Peoples to achieve a design for the Indigenous Voice, considering local, regional and national elements and how they interconnect.