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Calls to extend climate reporting to private companies

Large private companies and government bodies should be captured under climate disclosure rules, according to the Centre for Policy Development.

March 13, 2023
By Poppy Johnston
13 March 2023

A public policy think tank wants large private companies to report on climate risk alongside their public counterparts to stop climate-exposed businesses going private to dodge oversight.

The Centre for Policy Development, a key contributor to the debate on the economic risks posed by climate change, also says large government entities, such as Australia Post and the Future Fund, should be forced to disclose.

The think tank has made the case for consistent, economy-wide rules on disclosing climate risks via a submission to Treasury’s review into a standardised system for climate reporting.

The federal government’s commitment to climate risk disclosure follows mounting pressure on companies to report on the risks climate change pose to their business.

Risks include the physical threat of changing weather patterns and how the low-carbon transition will affect business operations.

CPD sustainable economy director Toby Phillips said listed companies would struggle to report accurately if large private companies were exempt from the rules.

That’s because private companies are often part of public companies’ supply chains.

“Listed companies required to disclose scope three emissions in their supply chain should not be forced into guesswork because a privately-held supplier can choose not to report its own emissions,” Mr Phillips said.

“When companies are reporting on their supply chains, a shipment of iron ore or a load of cement from one supplier could have a firm number on it, but the same product from a competitor would not,” he added.

The submission also warned investors could try to take climate-exposed businesses private to avoid oversight under a two-tiered system.

Mr Phillips also believes public entities should play by the same rules given government spending and investment makes up 25 per cent of the economy.

“Large entities like Australia Post, the Future Fund, or Defence Housing Australia play significant roles in the economy, and they should be setting the standard, not lagging behind.”

The organisation also recommended aligning with global standards and phasing in reporting requirements for select public authorities, large listed companies and other climate-exposed entities. 

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