Proposed changes to Australian mandatory disclosure liability a sensible accountability safeguard

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on proposed amendments to the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, which currently sits before the Australian Senate.

The current draft of the Bill allows for the progressive phase-in of mandated and standardised climate reporting by listed and unlisted Australian companies from January 1, 2025.  Statements made relating to transition plans, scenario analysis and Scope 3 emissions will have legal immunity from private litigation during the Bill’s first three years of implementation. Only criminal cases, and matters pursued by the Australian Securities and Investments Commission (ASIC), would be able to be brought forward during this period.

 Amendments brought forward by the Australian Greens propose:

• Reducing  the immunity period for private litigation to 12 months
• Limiting the immunity’s scope to “loss or damage suffered as a result of conduct that is misleading or deceptive, or likely to mislead or deceive”.

Commenting on the proposed amendments, Brynn O’Brien, Executive Director, ACCR, said:

“Companies don’t need a prolonged holiday from shareholder enforcement of accountability provisions which are applicable today.

“Investors are making decisions now about how they wish to allocate capital and how to engage and escalate with heavy emitting companies. They need reliable information with integrity. An extended enforcement holiday decreases the motivation for companies to take mandatory climate disclosures seriously.

“ACCR is particularly concerned about the effect the three year legal immunity would have upon the disclosures of our largest heavy emitters that have been releasing climate transition plans and disclosing in line with the Task Force for Climate-related Financial Disclosures (TCFD) for years.

“ACCR’s case that challenges statements made by oil and gas company Santos, for example, could not be brought by a shareholder for three years under the draft legislation the government has put forward.

“It is an inappropriate burden to place the sole responsibility of enforcing these provisions on under-resourced regulators for such a prolonged period.”