Threat to mandatory climate-related financial disclosure laws

The Albanese government’s proposed mandatory climate-related financial disclosure laws may be under threat from the Coalition and the Greens.

The Coalition is pushing back against the proposed laws and have expressed concern the regime may cost the economy $2.3bn annually.

While the Senate Economics Legislation Committee recommended the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill pass in its report tabled on Friday, Coalition senators Andrew Bragg and Dean Smith used their dissenting report to express their concerns and called for a more thorough evaluation of the proposal.

“Spread across the 1800 entities, Treasury estimate will be captured at a minimum, that compliance cost could reach a potential annual cost of $2.3bn to the economy,” they said.

“Given the scope of this reform, the significant annual compliance cost, and significant variation from international standards, a more thorough evaluation of this legislation is essential to ensure Australia retains its economic competitiveness and that the regime — which will be subject to enforcement and litigation – is practical, feasible and does not leave small businesses or consumers behind.”

The Greens are refusing to support the mandatory climate disclosure reform unless Labor agrees to dump another bill aimed to simplify offshore oil and gas, The Australian reports.

Despite saying corporate climate reporting was “long overdue,” Greens Senator Nick McKim also expressed some concerns with the proposal in the report.

“While the Australian Greens acknowledge that corporate climate reporting is long overdue, there are aspects of the regime that must be adjusted in order to ensure an enduring long-term framework is in place and that greenwashing is not legally encouraged,” he said.