Speaking at an industry event on Tuesday, he highlighted the regulator’s focus on mandatory climate reporting which is expected to become law following royal assent.
From 1 January 2025, this legislation will impose mandatory climate reporting requirements on Australia’s largest companies and financial institutions, both listed and unlisted, with other large companies being phased in over time. It is expected to apply to more than 6,000 entities once fully implemented.
“Compliance teams will obviously play a crucial role in ensuring that their organizations are capable and ready to meet these new reporting obligations,” Longo said.
The executive previously described the introduction of a mandatory climate risk disclosure regime as “Australia’s biggest change to financial reporting and disclosure standards in a generation”.
Detailing how the regulator plans to approach compliance with the regime, he explained that the Australian Securities and Investments Commission (ASIC) intended to be “proportionate and pragmatic” in its approach, allowing the sector to acclimatize to the new requirements .
“We know that these reporting standards are new and that some of the information is new – perhaps more forward-looking than that required to be disclosed under other periodic financial reporting requirements,” Longo said.
“We also know that there will be a transition period while the industry continues to build capacity and implements the organizational changes that will be necessary to comply with the regime. We understand that.
He encouraged businesses to start preparing early and consider how this information can be integrated into existing risk and compliance measures.
On the other hand, ASIC’s position on greenwashing remains strict.
The regulator made almost 50 regulatory interventions targeting greenwashing in the 15 months to June 30, 2024, including civil proceedings against Active Super and Vanguard Investments Australia, and an $11.3 million fine against Mercer Super.
“Our greenwashing work involves focusing on sustainability claims made voluntarily by entities about their green credentials,” Longo said Tuesday.
“As I have said many times before, this work is based on the long-standing prohibition against misleading and deceptive behavior and comes down to ensuring that you do what you say you are going to do.”
Citing Justice Horan’s judgment in the Mercer Super case, Longo said it is vital that consumers in the financial services industry have confidence in the ESG claims made by providers of financial products and services.
