Australian companies are failing to properly disclose climate risk
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A new Market Forces study has revealed a chronic failure of Australian companies to disclose the risks to their business as a result of climate change impacts and actions to reduce greenhouse gas emissions.

Market Forces analysed the public disclosures of 73 ASX100 companies that operate in sectors facing the highest levels of climate risk. 

Climate risk disclosure across these companies was found to be largely inadequate, leaving investors and the public in the dark about the massive dangers climate change poses to the economy. The vast majority of companies have failed to incorporate the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), an initiative backed by investors managing over AU$100 trillion.

Clearly, voluntary schemes are not resulting in sufficient climate risk disclosure from companies. We need regulators to implement a mandatory TCFD-aligned disclosure framework for Australian companies.

Check out the detailed findings and complete company scorecard below, and take action, calling on APRA and ASIC to make climate risk disclosure mandatory for Australian companies.

Findings updated 29 March 2018

Key findings

Proportion of ASX100 companies with high climate risk exposure that…
Identify climate change as a material business risk
Disclose the risks & opportunities posed by climate change
Disclose 2°C scenario analysis
Disclose an emissions reduction plan
Have set an emissions reduction target

    Take action

    Tell regulators ASIC and APRA to make climate risk disclosure mandatory for Australian companies.


    These findings paint a clear picture of a systemic lack of climate risk disclosure from Australia’s largest, most highly exposed companies, and suggest a failure in the current corporate regulatory system. Voluntary disclosure of climate risk is simply not working.

    • Regulators should mandate a comprehensive, universal climate risk disclosure framework, i.e. TCFD recommendations;
    • Investors should hold companies accountable, and escalate climate risk disclosure in their engagement programs;
    • Companies should educate themselves about the need to take action and disclose.

    Take action! Tell Australia’s corporate and financial regulators, ASIC and APRA, to mandate TCFD-compliant disclosure from Australia’s companies and financial institutions.



    Yes - 66%

    While 66% of companies have unequivocally accepted climate science, 22% of companies are unclear in their language. The remaining 12% 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 provide an unequivocal acknowledgement of 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

    = Limited

    = No

    CompanySectorClimate scienceRemunerationMaterial riskRisk descriptionScenario analysisEmissions reduction planEmissions reduction target
    Commonwealth Bank of AustraliaFinancials

    Westpac Banking CorporationFinancials

    BHP Billiton LtdMaterials

    Australia And New Zealand Banking Group LtdFinancials

    National Australia Bank LtdFinancials

    Wesfarmers LtdConsumer Staples

    Woolworths LtdConsumer Staples

    Macquarie Group LtdFinancials

    Rio Tinto LtdMaterials

    Woodside Petroleum LtdEnergy

    Transurban GroupIndustrials

    Scentre Group*Real Estate

    South32 LtdMaterials

    Westfield CorpReal Estate

    Suncorp Group LtdFinancials

    Amcor LtdMaterials

    Newcrest Mining LtdMaterials

    Insurance Australia Group LtdFinancials

    Origin Energy LtdEnergy

    AGL Energy LtdUtilities

    Sydney AirportIndustrials

    AMP LtdFinancials

    QBE Insurance Group LtdFinancials

    Goodman GroupReal Estate

    Treasury Wine EstatesConsumer Staples

    StocklandReal Estate

    Oil Search LtdEnergy

    James Hardie Industries PlcMaterials

    Aurizon Holdings LtdIndustrials

    DexusReal Estate

    Santos LtdEnergy

    Lend Lease GroupReal Estate

    APA GroupUtilities

    GPT Group*Real Estate

    Boral LtdMaterials

    Medibank Private LtdFinancials

    Caltex Australia Ltd*Energy

    Qantas Airways LtdIndustrials

    Vicinity CentresReal Estate

    Mirvac GroupReal Estate

    Bluescope Steel Ltd*Materials

    Fortescue Metals GroupMaterials

    Challenger LtdFinancials

    Orica LtdMaterials

    Incitec PivotMaterials

    Alumina Ltd*Materials

    Bendigo And Adelaide Bank LtdFinancials

    The A2 Milk Company LtdConsumer Staples

    Cimic Group LtdIndustrials

    Bank Of Queensland LtdFinancials

    Coca-Cola Amatil LtdConsumer Staples

    Iluka Resources LtdMaterials

    Spark Infrastructure TrustUtilities

    Downer EDI LtdIndustrials

    Orora LtdMaterials

    CYBG PlcFinancials

    Macquarie Atlas Roads LtdIndustrials

    Magellan Financial Group LtdFinancials

    Northern Star Resources LtdMaterials

    Qube Holdings LtdIndustrials

    Janus Henderson Group PlcFinancials

    IOOF Holdings LtdFinancials

    Ausnet Services LtdUtilities

    Evolution Mining LtdMaterials

    Duluxgroup LtdMaterials

    BT Investment Management LtdFinancials

    Charter Hall GroupReal Estate

    OZ Minerals LtdMaterials

    Adelaide Brighton LtdMaterials

    CSR LtdMaterials

    Perpetual LtdFinancials

    Investa Office FundReal Estate

    Graincorp LtdConsumer Staples

    *2017 reports due


    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 (or lack thereof…)

    Australia’s corporate regulator ASIC provides only limited guidance on how companies should report on climate risk.

    Companies are legally required to disclose their material business risks. But ASIC has not yet clarified the level of specific climate risk disclosure required of companies operating in even those sectors most exposed to climate risk.

    In this dearth of formal guidance, Australia’s companies are clearly failing to provide comprehensive climate risk disclosures, leaving investors ill-informed when it comes to assessing and acting upon their own level of risk.

    APRA, which governs the Australian financial services industry, has spoken publicly about the immediate legal requirement of financial institutions to consider and act on climate risk. To do so, these major investors need consistent, comprehensive and comparable climate risk reporting from companies.

    ASIC should be acting to mandate a comprehensive and comparable climate risk reporting framework  consistent with the TCFD recommendations.

    What we need from regulators
    • Guidance clearly stating that companies exposed to climate change risks are legally required to disclose those risks as part of their financial reporting obligations
    • A mandate for 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

    Clarion calls from investors

    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.

    “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