The Federal Government has proposed new laws to force big business to disclose climate efforts. 

Treasurer Jim Chalmers says Australian firms “need to make credible disclosures to remain competitive in global capital markets”.

“There’s now broad acceptance that proper disclosure of these financial risks and impacts isn’t a nice-to-have extra,” he said on Monday. 

“This information is need-to-know - essential to mobilising the weight of our financial system behind the net zero transition.”

The government says businesses and investors need clarity and certainty to manage climate risks and guide their investment.

It is calling on large business and financial institutions to provide “more information and greater transparency on how they are responding to climate change and supporting the transition to net zero”.

New reporting requirements will reportedly be mandatory for large entities and phased in over time, while the government will also apply “appropriately tailored requirements to comparable commonwealth public sector corporate entities and investment funds”.

Policy director at the Investor Group on Climate Change, Erwin Jackson, has welcomed Australia “catching up” on climate-related disclosures. 

He said the planned changes could “support the unlocking of the billions of dollars of investment that are going to be needed on the transition to net zero”.

“We have very large number of companies voluntarily disclosing at the moment but one company discloses one thing and another company discloses another thing and it’s really impossible for investors to get clear information to compare companies,” he said.

“The sooner investors have clarity on the robustness of companies’ plans, the sooner they’ll be able to back those companies and industries on delivering the new industries and the new jobs that are going to be created as we address climate change.”