In its submission, the ICA highlighted the importance of this legislation in fostering more consistent climate-related financial disclosures and commended the government’s inclusive approach in seeking input.
“The Insurance Council of Australia (Insurance Council) thanks the Australian Government for the opportunity to provide a submission in response to the climate-related financial disclosure exposure draft legislation,” said ICA CEO Andrew Hall in the submission letter. “We appreciate the collaborative approach the government has taken to welcome submissions from the business community, civil society, government bodies, and other interested stakeholders. We recognise the draft legislation is an important next step for more consistent climate-related financial disclosures and welcome the opportunity to comment.”
The ICA’s feedback emphasised several key points, including the need for international alignment of Australia’s mandatory disclosure legislation and standards with global benchmarks to facilitate interoperability and consistency for entities operating in multiple jurisdictions.
It also advocates for reporting flexibility for Australian subsidiaries of foreign companies and for Australian entities with significant operations abroad, suggesting they be allowed to rely on their global climate financial risk reports to reduce administrative burdens and enhance reporting quality.
Furthermore, the ICA calls for clarity on modified liability for forward-looking statements in sustainability reports, suggesting a broad application to ensure reasonable discussion and duplication of statements made outside these reports.
The submission also addressed the uncertainty of financial projections related to climate risks and opportunities, proposing standardised disclaimer wording in the legislation.
Finally, the ICA endorsed the initial requirement for limited assurance on disclosures, recommending that any move to more stringent assurance align with the development of auditing standards and capabilities in Australia.
In other news, the ICA recently shared its insights on the General Insurance Code Governance Committee’s (CGC) potential monitoring and compliance priorities for 2024-25.