Parliament has voted to establish a Senate Economics References Committee Inquiry into carbon risk disclosure practices in Australia.
The inquiry, which was agreed to on Tuesday and put forward by Greens Senator Peter Whish-Wilson, is set to report by 22 June 2016 on carbon risk disclosure in regards to:
- current and emerging international carbon risk disclosure frameworks
- current carbon risk disclosure practices within corporate Australia
- Australian involvement in the G20 Financial Stability Board discussions on carbon risk impacts for financial stability
- current regulatory and policy oversight of carbon risk disclosure across government agencies
- any other related matters
The news was welcomed by the Climate Institute, which has been calling for close examination of the financial risks to the economy posed by carbon exposure.
“Australia has one of the most emissions-intensive economies in the world,” Climate Institute chief executive John Connor said.
“We are also more exposed to the effects of climate change than any other developed country.”
Mr Connor said it was crucial that financial and economic policymakers understood how climate change affected their work, and that the Senate inquiry would be a positive opportunity for public discussion.
“Many investors are realising that the world has changed and that the drive to get to net zero carbon emissions will bring opportunities and risks,” he said. “However others are still unaware of how the shift to a climate-safe economy will challenge many of the old assumptions behind financial and investment policy.
“The past few months has seen companies, investors and global authorities take unprecedented action on climate risk. The international agreement struck in Paris in December helped galvanise action, but falling prices of fossil fuels, particularly coal, have also alerted investors to the risks of banking on a high-carbon future.”
The news follows the establishment of The Task Force on Climate-related Financial Disclosures set up in early December 2015 by the Financial Stability Board, a global group of financial supervisors whose members include the Reserve Bank of Australia and the Australian Treasury.
It will be led for New York mayor Michael Bloomberg, and includes BHP’s Dr Fiona Wild, among other private sector experts.
“This is an important milestone is recognising the wide ranging financial implications of climate change for all economies,” chief executive of the Investor Group on Climate Change Emma Herd said at the time.
“Good carbon risk disclosure is the foundation of good risk management.
“Better collaboration between industry and financial policymakers on long term carbon risk management will increase Australia’s carbon competitiveness and resilience to the economic impacts of climate change.”