Climate-Related Financial Disclosure Consultation Paper Submission

We thank the Treasury for the opportunity to make a submission in response to this Consultation Paper. The Consultation Paper raises several questions for consideration, and our submission responds to Question 5. We welcome the opportunity to make comments on regulatory design choices and considerations, focusing particularly on our recommendation to incorporate ‘digital by design’ (‘DBD’) principles into the design of a new climate-related financial disclosure regulatory framework for Australia.

We recognise the potential advantages of adopting mandatory climate-related financial disclosure obligations for certain entities. However, we are concerned about the ability of such entities to comply with these obligations in an efficient and cost-effective manner if key concerns surrounding compliance burdens and digital implementation remain unaddressed. Despite rapid digital transformation over the past few decades, the cost of administering and complying with regulatory requirements continues to place a significant burden on Australian businesses. We argue that Australia’s regulatory frameworks should evolve to incorporate DBD principles in order to reduce compliance burdens and promote the flexible and scalable digital implementation of climate-related financial disclosure obligations.

In relation to Question 5, we make the following points:
1. We recommend the incorporation of DBD principles into the creation of a new regulatory framework for climate-related financial disclosure obligations, in alignment with the Treasury reform principles.
2. We outline specific DBD considerations for the design of new climate-related financial disclosure regulation.