August 2024 ESG Policy Update – Australia

Introduction

The Australian Securities and Investments Commission (ASIC) has released an updated version of its Environmental, Social and Governance (ESG) policy, which will come into effect on 1 January 2025. The policy sets out ASIC's expectations for how listed companies should disclose and report on ESG matters.

Key changes

The key changes in the updated policy include:

• A requirement for companies to disclose their ESG risks and opportunities in their annual reports.
• A requirement for companies to report on their progress towards achieving their ESG goals.
• A requirement for companies to consider the impact of their ESG performance on their stakeholders.

Impact on listed companies

The updated ESG policy will have a significant impact on listed companies. Companies will need to review their current ESG disclosure and reporting practices to ensure that they comply with the new requirements. They will also need to develop strategies to manage their ESG risks and opportunities and to achieve their ESG goals.

Benefits of ESG disclosure

There are a number of benefits to ESG disclosure for listed companies. These include:

• Improved access to capital.
• Reduced risk of litigation.
• Enhanced reputation.
• Increased employee engagement.

Conclusion

The updated ESG policy is a significant step forward in promoting ESG disclosure and reporting in Australia. The policy will help to improve the quality of ESG disclosure and reporting by listed companies, and it will also help to raise awareness of the importance of ESG factors among investors and other stakeholders.