Australian parliament pushes for sustainability risk disclosure

Sydney, 6 July: An Australian parliamentary committee has recommended that sustainability reporting should not be made mandatory for major companies but has urged the Australian Stock Exchange (ASX) to do more to encourage disclosure of sustainability risks and management strategies.

A report on corporate responsibility by the joint committee on corporations and financial services said ASX guidelines on good corporate governance should be amended to encourage companies to disclose their top five sustainability risks and their risk management strategies.

A minority recommendation by Labor party members of the committee urged that 'top five' disclosure be made mandatory for larger companies in most circumstances. The committee also recommended that the ASX consider providing an online service similar to the London Stock Exchange's Corporate Responsibility Exchange, in order to provide sustainability rating agencies and others with easy access to corporate responsibility data.

The committee said companies should structure senior management remuneration packages in a way that includes incentives for achieving longer-term targets in order to encourage a greater focus on sustainability issues. It said the federal government should provide seed funding to establish a network based on the UK 'business in the community' initiative and recommended that institutional investors become signatories to the United Nations Principles for Responsible Investment.