21 July 2023 Climate Disclosure Unit Market Conduct Division The Treasury Langton Crescent Parkes ACT 2600 Via email: climatereportingconsultation@treasury.gov.au
Dear Sir/Madam SUBMISSION – CLIMATE-RELATED FINANCIAL DISCLOSURE: CONSULTATION PAPER JUNE 2023 We appreciate the opportunity to provide comment to Treasury on the Climate-related Financial Disclosure Consultation Paper June 2023 (the Consultation Paper). Pitcher Partners is an association of independent firms operating from all major cities in Australia. Firms in the Pitcher Partners network are full service firms and we are committed to high ethical standards across all areas of our practice. Our clients come from a wide range of industries and include listed and non-listed disclosing entities, large private businesses, family groups, government entities, not-for-profit entities and small to medium sized enterprises. Pitcher Partners are fully supportive of the need to respond appropriately to climate change which we and others locally and internationally recognise as presenting material risks to the global financial system – risks which need to be managed by capital markets, regulators and corporations. We acknowledge that climate change risks include physical risks of climate change and the transition risks associated with policy as well as the regulatory and technological changes which will be necessary as part of our efforts to mitigate climate change. Disclosure represents a small part of the changes required in businesses to reflect climate change, we recognise that an important tool to manage both individual and systemic climate-related financial risks is identification, quantification and disclosure of those risks. The establishment of the International Sustainability Standards Board (ISSB) in 2021 to develop comprehensive baseline global standards for climate disclosure (based on the recommendations of the Taskforce on Climate-Related Financial Disclosures) and sustainability reporting is part of the overall response to climate change. Overall, we support the Government commitment to applying standardized climate-related financial disclosure requirements to certain businesses in order to meet the growing demand for disclosure from some users of the financial statements in some sectors of the market. However, we have concerns regarding either the effectiveness and or clarity of some of the proposals in the Consultation Paper to make a meaningful impact in addressing climate change in the current economic environment, namely: • • •
Tim Nesbitt
The breadth of the application of the disclosures particularly to large privately held businesses The timing of the roll out particularly given concerns about the availability of resources The cost implications of the roll out given concerns about the availability of resources, and the capacity of business to absorb another increase in costs both internal and external given current economic conditions