Origin Energy - Submission in response to: Climate-related financial disclosure

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Origin Energy Limited ABN 30 000 051 696 • Level 32, Tower 1, 100 Barangaroo Avenue, Barangaroo NSW 2000

GPO Box 5376, Barangaroo NSW 2000 • Telephone (02) 8345 5000 • Facsimile (02) 9252 9244 • www.originenergy.com.au

17 February 2023

Climate Disclosure Unit

Market Conduct Division

The Treasury

Lodged by email: climatereportingconsultation@treasury.gov.au

Dear Sir/Madam,

Response to Climate-related financial disclosure consultation paper

Origin Energy Limited (Origin) welcomes the opportunity to provide comments on the Climate-related

financial disclosure consultation paper.

Origin is a large Australian integrated energy company with activities in energy retailing, power

generation, natural gas production and LNG export. Origin also has recent experience in exploring

new product offerings and has focused on areas such as solar & storage, connected homes, electric

vehicles (EVs) and future fuels including hydrogen.

Origin has produced an annual Sustainability Report since 2001 which has covered a range of issues

including the environment and climate change. More recently, we have started incorporating various

international reporting standards. For example, our 2022 Sustainability Report referenced the Global

Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB) and supported the

Task Force on Climate related Financial Disclosures (TCFD).

Generally, we are supportive of the proposal to improve the climate-related financial disclosures in

Australia and align these with international standards where practical. Origin has been involved in the

AASB-AUASB Sustainability Reporting Project Advisory Panel, participating as member of the panel.

We provide responses to specific consultation paper questions in the attached table.

If you wish to discuss any aspect of this submission further, please contact at

Yours sincerely

Manager Green and Future Energy Policy

Origin Energy Limited

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Origin Energy Limited ABN 30 000 051 696 • Level 32, Tower 1, 100 Barangaroo Avenue, Barangaroo NSW 2000

GPO Box 5376, Barangaroo NSW 2000 • Telephone (02) 8345 5000 • Facsimile (02) 9252 9244 • www.originenergy.com.au

Attachment A: Responses to specific consultation paper questions

Issue

Question No

Origin response

Costs and

benefits

1.1

• Costs include additional resources for companies in a short timeframe, which may distract from

other priorities.

• Benefits – enables investors to make more informed decisions; mandates the requirement for

companies to identify, quantify and mange climate risks.

1.2

• The potential cost of Australia not aligning with international practice is that Australian companies

may be less competitive for international capital.

• Potential benefits of alignment with international standards are that it should improve consistency,

comparability and quality of climate related information and may reduce internal resource

requirements for reporting climate related information.

Phased

approach

• Yes, a phased approach is suitable.

• We suggest multiple phasing tranches to allow for medium and small-caps and private companies

to build teams, invest in resources and upskill, and to learn from the experience of larger

companies.

Size thresholds

• Market capitalisation is one option. For example, ASX top 50/100 companies could form the

starting point for a large, listed company.

• Another consideration is emission profile – a company that considers climate risk as a material or

strategic risk (noting this may be more difficult to mandate).

Alignment with

global standards

4.1

• Yes, Australia should seek to align with the climate reporting baseline envisaged by the ISSB.

• Metrics need to be relevant for Australia and aligned with existing Australian regulatory

frameworks.

4.2

• Yes, we support the ISSB standards as the appropriate Australian standards to ensure

international alignment.

Regulatory

framework

• Key considerations include a clearly defined materiality approach so that metrics/issues that are

not material or relevant do not have to be reported. We understand this will require balancing

flexibility with specificity in the regulatory framework.

Periodic

reporting

requirements

• Reporting requirements need to maintain flexibility to be in other reports. Currently, TCFD

disclosures may be found in more than one location and not always in the OFR/Annual Report.

Materiality

• We support aligning materiality assessment with financial materiality principles, as recommended

by the TCFD and consistent with the approach of the ISSB.

Assurance

• We support limited assurance for emissions data, undertaken by independent and qualified

experts.

• Limited assurance could be provided by the company’s financial auditor or could be independent.

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• It should be noted that assurance providers are a limited resource and can be hard to procure.

Sufficient time should be allowed for assurance providers to be engaged and carry out their roles.

Reporting of

metrics

• A key consideration is timing – NGERs is reported by end of October while many Australian

companies with a June year-end report in August.

• Methodologies – should be aligned with NGERs and GHG Protocol as much as practical, noting

that NGERs does not cover Scope 3 emissions.

• Yes, but a minimal set of baseline metrics to allow for some flexibility.

• Companies can briefly describe what their transition plans are as part of ISSB disclosures but be

able to refer to other documents if needed. For example, Origin references it Climate Transition

Action Plan, which is relatively detailed.

• Yes, smaller companies should have less onerous disclosure requirements which should be

phased in gradually to allow them time to mature processes and build capability.

Data

• Many companies may not know how to calculate emission or how to start the process.

• Guidance on calculating emissions as well what software and tools are available would be useful

for companies who do not currently report under NGERs.

Governance

• The International Energy Agency (IEA) provides some estimates out to 2050. The Australian

Energy Market Operator (AEMO) provides scenarios on the Australian electricity market.

Proportionate

application of

liability

• NA

Interaction with

other reporting

obligations

• NA

Sustainability

reporting

• Standards should be flexible enough to extend to other sustainability topics that are material to a

companies’ enterprise value (or whatever the relevant materiality test is). But the sustainability

content should be able to be grouped together where applicable.

Digital

sustainability

reporting

• Digital reporting should not be mandated but the benefits of digital reporting should be articulated

and assistance provided. Companies are at different levels of data and digital maturity. Websites

may be at different maturities and there may be significant cost barriers depending on the

organisational structure.

Structure of

financial

reporting system

• We have a preference for Option 3 (reform into a single, flexible entity) to ensure the body has

sufficient resources to carry out its functions, to maximise resource and funding flexibility and

better enable the execution of topical projects such as climate related financial disclosures.