The corporate cop says environmental, social and governance (ESG) issues are driving a generational shift in governance and financial reporting, and Australian companies must prepare for looming requirements on how they collect and analyse data, The Age reports.
As companies face growing public and investor pressure over their responses to climate change, chair of the Australian Securities and Investments Commission Joe Longo on Monday urged the corporate world to ready itself for major changes to financial reporting and disclosure standards.
Amid a boom in green finance, with fund managers around the world keen to spruik their environmental credentials, Longo said ESG was driving “the biggest changes to financial reporting and disclosure standards in a generation”.
“This is a transformational issue for global markets, and we need to be ready to meet that change at every step of its development,” Longo said in a speech to the Centre for Economic Development of Australia in Canberra.
Specifically, Longo pointed to looming global changes from the International Sustainability Standards Board, which are intended to set a baseline for sustainability-linked disclosure for capital markets. Longo said his message for firms was that they needed to be preparing for these reporting requirements, which are aimed at giving investors and markets better information on sustainability.
“These ambitious standards will require companies to adopt a systematic approach to collecting and analysing data across the company itself, and its supply chains. Preparation for that should be starting now,” Longo said.