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Investors alerted as ASX 300 companies fail on risk disclosures

Warning, alert, ASX 300, fail on risk disclosures

The corporate regulator has found listed companies’ approach to climate risk disclosures are “of limited use to investors” and don’t appropriately inform the public about risks to their investments.

ASIC today released findings of its report, Climate risk disclosure by Australia’s listed companies, which looked at climate risk disclosures of 60 listed companies in the ASX 300; in 25 recent initial public offering (IPO) prospectuses; and across 15,000 annual reports.

Of the 60 listed companies surveyed, 17 per cent identified climate risk as a material risk to their business. However, this was not necessarily reflected in the disclosures made to investors.

“While most of the reviewed ASX 100 entities had considered climate risk to the company’s business to at least some extent, disclosure practices were considerably fragmented, with information provided to the market in differing forms across a wide range of means of disclosure,” ASIC said in a statement released today.

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“In some cases, the review found climate risk disclosures to be far too general, and of limited use to investors. Outside of companies in the ASX 200, there was very limited climate risk disclosure by listed companies.”

The corporate regulator is now heralding a crackdown on those companies who falter on their risk disclosures.

“Climate change is a foreseeable risk facing many listed companies in the Australian market in a range of different industries. Directors and officers of listed companies need to understand and continually reassess existing and emerging risks (including climate risk) that may affect the company’s business – for better or for worse,” said ASIC commissioner John Price in a statement today.

“Climate risk disclosure practices are still evolving, not only in Australia but also globally. We intend to monitor market practice as it continues to evolve and develop in this area.”

Investors alerted as ASX 300 companies fail on risk disclosures
Warning, alert, ASX 300, fail on risk disclosures
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