Businesses and government are not immune from the risks associated with climate change. This risk includes extreme volatility to financial stability and unpreparedness for climate change and associated industry changes and therefore can be seen as a physical risk, transition risk and liability risk. The Senate Inquiry into Carbon Risk: a Burning Issue recommends that investor disclosure regarding climate change risk is a priority for a functioning financial system and Financial Stability Board Task Force on Climate-related Financial Disclosures is an appropriate mechanism to achieve this. Further, directors must be guided as to their responsibilities with regards to managing and internalising risk. The Report suggests reform of climate change policy and financial disclosure amendments to the Corporations Act 2001 (Cth). The Report is awaiting a response from Government.
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