Australian companies still failing to properly disclose climate risk
Take action

Last updated: 31 December 2018

For the most up-to-date research on the 22 Australian companies undermining climate action, view our Out of Line, Out of Time report:

Out of Line, Out of Time report

Australia’s largest companies are paying lip service to climate risk, but failing to demonstrate strategic responses.

In 2018, the IPCC made clear the scale and urgency of the low-carbon transition required to avoid the worst impacts of climate change. But the glaring lack of detail in Australian companies’ climate risk disclosures suggests they are unprepared for this transition.

Since Market Forces first conducted this research at the start of 2018, companies have become more willing to acknowledge climate change risks. However, very few have fully detailed the potential implications of these risks for their own business. Even fewer have disclosed plans to transition to a business model that aligns with the Paris climate goals.

Investors must demand companies demonstrate their ongoing viability in a scenario where global warming is limited to 1.5°C. Any company that is unable or unwilling to do so must face divestment.

Check out the detailed findings and complete company scorecard below. You can also download a copy of the updated PDF report released in February 2019 here.

See the company scorecard

*To complete this research, Market Forces analysed the public disclosures of the 72 ASX100 companies (as of December 2018) that operate in sectors highlighted by the TCFD as facing the highest levels of climate risk. This research is current as of 31 December 2018.

    Key findings

    Proportion of ASX100 companies with high climate risk exposure that...
    Identify climate change as a material business risk
    Detail climate risks & opportunities in mainstream reporting
    Disclose detailed climate change scenario analysis
    Disclose an emissions reduction plan
    Have set an absolute emissions reduction target
    Use your shares to improve companies' climate performance

    Of the $1.47b ASX100, $1.13b (77%) of the index operates in sectors identified by the TCFD as particularly susceptible to climate-related risks and opportunities.

    Of these companies, just 57% of companies recognise climate change as a material business risk. Even fewer (32%) provide a detailed discussion of the particular risks and opportunities climate change poses to their business.

    Just 14% of companies have disclosed detailed analyses showing how they will fare in different climate change scenarios, up slightly from 12% in August 2018 and 10% in March 2018. A further 21% have committed to disclose some level of scenario analysis in 2019, but it is unclear just how detailed and comprehensive these analyses will be.

    Significantly, only three companies - South32, AGL and Stockland - disclose in line with all recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Commonwealth Bank, BHP, Westpac, ANZ and Dexus each come close to fully satisfying the recommendations, while Macquarie is among the companies that have committed to addressing all recommendations in their 2019 reporting.


    • Investors should escalate climate risk disclosure in their engagement programs, demand companies produce 1.5°C transition plans, and divest from companies that are unable or unwilling to do so;
    • Regulators should mandate a comprehensive, universal climate risk disclosure framework, i.e. TCFD recommendations;
    • Companies should adopt all relevant TCFD recommendations, demonstrating their ongoing viability in a Paris-aligned emissions reduction scenario.

    Take action! Tell your super fund to bring companies into line with the Paris climate goals.



    Unequivocally - 65%

    March 2018 - 66%

    While 65% of companies have unequivocally accepted climate science, 25% are unclear in their language. The remaining 10% have not formally acknowledged the science of climate change.

    Acknowledgement of climate science demonstrates that a company’s board and senior executives understand the need to decarbonise the economy, and have considered the implications this may have on their business.

    Methodology: to demonstrate acceptance of climate science, the company must unequivocally acknowledge the aims of the Paris Agreement or the need to decarbonise by the second half of the century; simply mentioning climate change is not sufficient.


    Risk Management


    Metrics and Targets

    Company Scorecard

    = Yes

    = Partial

    = Limited / Unclear

    = No

    Updated 31 December 2018

    CompanySectorClimate scienceRemunerationMaterial riskRisk descriptionScenario analysisEmissions reduction planEmissions reduction target
    Commonwealth Bank of Australia*Financials

    BHP Billiton LtdMaterials

    Westpac Banking Corporation*Financials

    Australia and New Zealand Banking Group Ltd*Financials

    National Australia Bank LtdFinancials

    Macquarie Group Ltd*Financials

    Woolworths Group LtdConsumer Staples

    Transurban GroupIndustrials

    Woodside Petroleum LtdEnergy

    Rio Tinto LtdMaterials

    Scentre GroupReal Estate

    Goodman GroupReal Estate

    Suncorp Group LtdFinancials

    Insurance Australia Group Ltd*Financials

    Newcrest Mining LtdMaterials

    South32 LtdMaterials

    Amcor LtdMaterials

    Coles GroupConsumer Staples

    Sydney AirportIndustrials

    QBE Insurance Group LtdFinancials

    Cimic Group LtdIndustrials

    Fortescue Metals GroupMaterials

    AGL Energy LtdUtilities

    ASX LimitedFinancials

    Origin Energy Ltd*Energy

    Santos LtdEnergy

    Oil Search LtdEnergy

    DexusReal Estate

    APA GroupUtilities

    Vicinity Centres*Real Estate

    Treasury Wine EstatesConsumer Staples

    Qantas Airways Ltd*Industrials

    GPT GroupReal Estate

    StocklandReal Estate

    Aurizon Holdings LtdIndustrials

    Mirvac GroupReal Estate

    AMP LtdFinancials

    Caltex Australia LtdEnergy

    Lend Lease GroupReal Estate

    The A2 Milk Company LtdConsumer Staples

    James Hardie Industries PlcMaterials

    Medibank Private LtdFinancials

    Orica Ltd*Materials

    Alumina LtdMaterials

    Coca-Cola Amatil LtdConsumer Staples

    Incitec Pivot*Materials

    Bluescope Steel Ltd*Materials

    Boral Ltd*Materials

    Challenger Ltd*Financials

    Ausnet Services LtdUtilities

    Evolution Mining LtdMaterials

    Bendigo And Adelaide Bank LtdFinancials

    Northern Star Resources LtdMaterials

    Unibail-Rodamco-WestfieldReal Estate

    Atlas ArteriaIndustrials

    Magellan Financial Group LtdFinancials

    Whitehaven Coal LtdMaterials

    Qube Holdings LtdIndustrials

    Bank Of Queensland LtdFinancials

    Orora LtdMaterials

    Spark Infrastructure TrustUtilities

    Downer EDI Ltd*Industrials

    Adelaide Brighton LtdMaterials

    Iluka Resources LtdMaterials

    Charter Hall GroupReal Estate

    CYBG PlcFinancials

    OZ Minerals LtdMaterials

    Duluxgroup Ltd*Materials

    Pendal Group LtdFinancials

    IOOF Holdings LtdFinancials

    Janus Henderson Group PlcFinancials

    CSR LtdMaterials

    * Committed to disclosing scenario analysis in 2019
    † Emissions intensity target only
    ‡ Detailed risk description in CDP response only


    What is the TCFD?

    The Task Force on Climate-related Financial Disclosures (TCFD) was a initiative of the G20 Financial Stability Board (FSB), which was set up in the wake of the 2008 financial crisis to try to avoid similar market shocks.

    In a landmark 2015 speech, FSB Chair Mark Carney stated " Shifts in our climate bring potentially profound implications for... financial stability and the economy." The European Systemic Risk Board has warned that climate change could wreak havoc on financial markets.

    In response to these kinds of warnings, the TCFD was tasked with considering the physical, liability and transition risks posed by climate change, and developing a consistent framework for companies to disclose those climate-related financial risks to investors, lenders, insurers, and other stakeholders.

    The Task Force released its draft recommendations in December 2016, and the final version in June 2017. The framework has attracted the support of over 240 organisations, including 150 financial institutions that manage a combined AU$100 trillion.

    Importantly, the TCFD recommendations identified a number of 'high risk' sectors, for which it suggested more robust reporting. These were: Finance; Energy; Transportation; Material and Building; and Agriculture, Food and Forest Products.

    Source: TCFD Final Recommendations

    What does the TCFD mean for investors and companies?

    The TCFD recommendations give investors a consistent comprehensive framework through which they can analyse the climate risk exposure of the companies they invest in, or those they are considering investing in.

    With this increased understanding of risk, investors are able to make more informed decisions about capital allocation.

    In turn, companies are incentivised to better consider and reduce the risks posed to their business by climate change. Companies that can't demonstrate how they plan to survive in a carbon-constrained economy risk facing decisive action from investors, including divestment.

    “Increasing transparency makes markets more efficient, and economies more stable and resilient.”Michael R. Bloomberg, TCFD Chair

    How does the TCFD compare to the Carbon Disclosure Project?

    The TCFD framework recommends companies incorporate climate risk disclosures into mainstream annual financial reporting.

    Financial reports are treated as formal disclosures to the sharemarket, meaning the company is accountable to the accuracy of any claims made therein. 

    This is an important development to the CDP system, which asks companies to respond directly to questions put the CDP.

    Despite having had 15 years to get on board, less than 40% of ASX200 companies responded to the CDP in 2017. Clearly, companies are failing to self-drive a culture of comprehensive disclosure.

    As shown by our research, voluntary reporting following the TCFD framework has also had little take up amongst Australian companies.

    Regulatory guidance

    Australian regulators ASIC, APRA and ASX Corporate Governance Council have all stepped up their public rhetoric on the issue, and are taking steps to ramp up guidance and scrutiny around climate risk disclosure.

    A September 2018 ASIC report found many companies were breaking the law by failing to adequately consider and disclose climate risk.

    This is perhaps unsurprising, given legal warnings that companies and their directors must consider climate change risks and disclose all material business risks.

    But regulators are yet to clarify what specific climate-related disclosures are required of companies operating in even the most exposed sectors.

    We need regulators to mandate a TCFD-compliant climate risk reporting for all companies operating in 'high risk' sectors, as well as financial institutions.

    "Some climate risks are distinctly ‘financial’ in nature. Many of these risks are foreseeable, material and actionable now."Geoff Summerhayes, APRA Executive Board Member

    Investor group action, but room for improvement

    Investors are calling for robust climate risk disclosure from the markets they invest in. Over 150 financial institutions from around the world, representing around AU$100 trillion in investments, have publicly supported the TCFD reporting framework.

    Over 250 institutional investors, managing over AU$35 trillion, are driving the Climate Action 100+ initiative. The project aims to "engage with the world’s largest corporate greenhouse gas emitters to improve governance on climate change, curb emissions and strengthen climate-related financial disclosures."

    The world's biggest investor, BlackRock, has taken some small steps towards climate action. In December 2017 BlackRock sent letters to 120 companies, urging them to adopt the TCFD recommendations. Earlier last year, BlackRock voted in favour of shareholder resolutions calling for climate risk disclosure from Exxon Mobil and Occidental Petroleum. However, it must be noted that BlackRock's efforts have been relatively minimal, with the investor having regularly failed to support other climate-related shareholder resolutions, not wielding its considerable power to shift recalcitrant companies.

    The Exxon resolution was the first of its kind to pass, attracting 62% of the vote despite Exxon's board recommending shareholders vote against it. In Australia, six shareholder resolutions calling for improved climate risk disclosure have been lodged since May 2017.

    Clearly, investors are beginning to act on the massive threat climate change poses to the future viability of many companies. Universal, comprehensive and comparable climate risk disclosure can arm investors with the information they need to allocate capital in a way that drives the transition to a low carbon economy.

    While these large scale investor groups are important, they cannot replace the need for individual investors to engage directly with the companies they own to ensure they are appropriately managing climate risk. Importantly, investor groups’ asks generally fall short of demanding companies operate in line with a Paris-aligned climate scenario.

    “As institutional investors and consistent with our fiduciary duty to our beneficiaries, we will work with the companies in which we invest to ensure that they are minimising and disclosing the risks and maximizing the opportunities presented by climate change and climate policy.”Global Investor Statement on Climate Change