Australia's corporate and financial regulator Australian Securities and Investments Commission (ASIC) has been more actively monitoring companies that participate in the carbon market, industry sources said.
The regulator has recently been requesting more documents to some firms that operate in the Australian Carbon Credit Unit (ACCU) market, but it was not clear whether this was part of a wider surveillance of the sector, market participants told Argus. ASIC could not comment on the matter as its activities are confidential, it said.
Carbon industry member organisation Carbon Market Institute (CMI) had not received requests from ASIC, and did not have any feedback that the regulator's surveillance and enforcement actions have been focused on the ACCU market or on entities covered under the federal compliance market's safeguard mechanism, it said.
But ASIC has identified integrity and fairness in energy and carbon credit markets as one of its strategic priority areas in its 2024-25 strategic plan, Kurt Winter, CMI interim chief executive and director of corporate transition, told Argus on 22 August.
"CMI has a good working relationship with ASIC to facilitate information and education about best practice to the carbon market participants," Winter said.
An ASIC speaker is scheduled to present in a session on corporate climate risk governance and engaging with environmental and renewable energy markets held by the CMI on behalf of the Clean Energy Regulator (CER), Winter said. This will include topics on directors' duties, mandatory climate-related financial disclosure, and greenwashing legal and regulatory guidance.
ASIC has tightened climate risk disclosure rules in the past, and carried out surveillance of climate change-related disclosure practices by selected listed companies.
The ACCU market could also be attracting more attention as trading volumes in the over-the-counter (OTC) market have been increasing in recent years, and as the Australian Securities Exchange (ASX) launched environmental futures contracts for physically deliverable ACCUs, Australian large-scale renewable generation certificates (LGCs) and New Zealand emissions unit (NZU) last year, market participants said.
The ASX last month announced a formal agreement with a market maker, as it looks to enhance price discovery and boost liquidity for its ACCU and NZU futures contracts.
