Mandatory sustainability reporting – what Australian businesses need to know
The third development in sustainability reporting, and arguably the most relevant to Australian businesses, is the extent to which disclosures are becoming mandatory, as opposed to voluntary.
In July 2020, the Hong Kong Stock Exchange introduced new ESG reporting requirements for listed companies. In May 2021, the Securities and Exchange Board of India announced that from 2023, the top 1000 listed companies would be required to report on ESG parameters. In June 2021 the finance ministers representing the G7 agreed to introduce mandatory TCFD reporting in their respective jurisdictions. Most recently in May 2022, the US Securities and Exchange Commission issued a proposed rule amendment which would introduce ESG reporting requirements for registered investment advisers and investment companies. This is the second ESG related proposal to come from the SEC this year, with a climate-related disclosures being discussed in March also. Both these proposed amendments have yet to be finalised.
ESG reporting is developing rapidly
The three trends identified in this series of posts demonstrate that the global architecture of ESG reporting is developing rapidly. It’s becoming increasingly streamlined, broader in scope, and increasingly mandated as opposed to voluntary. As the fallout of ongoing conflict in Europe is felt across much of the Australian economy, the myriad linkages that make up global supply chains are more obvious than ever.
Australian companies with international subsidiaries, foreign investees, or counterparty obligations must prudently monitor overseas developments in the reporting space and be prepared to disclose their ESG impacts in accordance with burgeoning international sustainability reporting standards. In the next blog we will take a deeper look at the implications of global developments for Australian businesses.
Embedding sustainability into business strategy
At Zooss, our planet-passionate team believes that embedding sustainability into business strategy, operations and culture is essential for organisations aiming to drive positive change in their business and sustainability impact.
Find out more about Sustainable Business Planning and to start planning sustainably, contact us.
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