ASX publishes new corporate governance guidelines

Listed entities in Australia will now be asked to disclose whether they have material exposure to economic, environmental & social risks.

The Australian Securities Exchange (ASX) has updated its "Corporate Governance Principles and Recommendations", requiring ASX-listed companies to either disclose and identify how they intend to manage environmental and social sustainability risks, or explain why they have not. 

Listed entities in Australia will now be asked to disclose whether they have any material exposure to economic, environmental and social sustainability risks and, if they do, how it manages or intends to manage those risks. This new requirement is based on demand from global investors and businesses that are seeking greater transparency on economic, environmental and social issues affecting a company's prospects, thereby influencing investment decisions, especially by institutional investors.

CDSB and CDP have been actively engaging with Stock Exchanges, policymakers and others on disclosure of non-financial information and welcome the development of increased guidance for listed companies in Australia. ASX has listed CDSB in its recommendations as one of the “increasing calls globally for the business community to address matters of economic, environmental and social sustainability.”

CDSB encourages listed companies to adhere to best practice when disclosing non-financial information, including focusing on reporting harmonisation. In the absence of international agreement by States or Stock Exchanges, it is vital to work together to prevent divergent local reporting requirements developing.

Similar initiatives are underway at Stock Exchanges around the world and governments are increasingly interested in the potential of integrating environmental and other non-financial information in mainstream reports. 

As we prepare for the UN Secretary General's climate change summit in September 2014, it is clear that the corporate sector will have a greater role driving the changes to help the world shift toward a low-carbon economy. CDSB calls on regulators to accelerate the pace at which stock exchanges are setting climate change (inclusive of stranded assets) and environmental listings requirements for companies.

CDSB encourages listed companies to adhere to best practice when disclosing non-financial information, including focusing on reporting harmonisation. In the absence of international agreement by States or Stock Exchanges, it is vital to work together to prevent divergent local reporting requirements developing.

View press release here.