Corporations and Climate Change: An Investigation of Mandatory Climate Risk Disclosure in Australia

While corporations aggravate the growing climate crisis, climate change in turn poses equal threat to corporations. By physical impacts on assets and operations, and the implications of transitioning to a low-carbon economy, climate risk is both environmental and financial. Mandatory climate risk disclosure in financial reporting is one proposed strategy to mitigate financial climate risk and additionally, lessen corporate climate impact. In Australia, disclosure rules under the Corporations Act 2001 (Cth) (the Act) do not explicitly require reference to climate risk. In light of recent ASIC guidance suggesting climate risk disclosure may be mandated under s 299A(1)(c), this article investigates Australian companies' climate risk disclosure obligations and their legal enforceability. The analysis reveals existing mandatory disclosure requirements for climate-related governance and risk management practices, and notwithstanding a lack of legal precedent enforcing climate risk disclosure obligations, shows compliance may indeed be legally enforceable under the Act.