Professor Peter Carey, one of the lead authors of the Deakin report, said this was particularly concerning given the increasing push for companies to adopt broader reporting initiatives beyond strict financials, many focused on driving sustainability.
'One hopes that the information being reported in these areas is credible, but we know as ASIC has recently identified that there's a lot of greenwashing going on,' Professor Carey said.
'This week the International Sustainability Standards Board issued two new sustainability disclosure standards, which are likely to be adopted in Australia, with the Treasury subsequently releasing its Climate-Related Financial Disclosure Consultation Paper stating that Australian requirements should be aligned with international practices.'
'Recommendation 4.3 is an important way the ASX can ensure disclosures like these are credible. But what our research shows is that most companies aren’t following the recommendation as intended. Most companies are providing either boilerplate disclosures or vague disclosures which are not particularly informative for investor decisions,' explained Professor Carey.
Recommendation 4.3 says a listed company should disclose its process to verify the integrity of any periodic corporate report released to the market that is not audited or externally reviewed. But in the 2021/22 financial year, 35% of the ASX300 provided no entity specific disclosure and 38% provided limited disclosure.
Only 27% provided what were rated as clear and comprehensive descriptions of the processes they used to ensure the integrity of other periodic corporate reports. Up just one percent on the previous year.