Opening statement by ob体育 Chair Joseph Longo at the Senate Economics Legislation Committee Budget Estimates, Wednesday 6 April 2022.
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Good morning, Chair and Committee members, and thank you for the opportunity to appear before the Committee today.
My Deputy Chairs Sarah Court and Karen Chester are joining us from Adelaide and Melbourne, respectively.
We are joined in Sydney by Commissioner Cathie Armour and Executive Director Greg Kirk. Commissioners Danielle Press and Sean Hughes are also joining from Melbourne.
Also appearing with me here in Canberra, are ob体育鈥檚 Chief Operating Officer Warren Day and our General Counsel Chris Savundra.
As the 46th parliament draws to a close, we wanted to update the Committee on two significant issues: digital transformation and climate-related disclosure.
Cathie Armour
But first I wanted to note that this is Commissioner Cathie Armour鈥檚 parliamentary hearing valedictory, as it will be her last Senate Estimates hearing, or any other hearing, as an ob体育 Commissioner. This is her 25th Senate Estimates appearance since her appointment in 2013.
The ob体育 Commissioners and I would like to mark this occasion and recognise Cathie for her service to ob体育 and her dedication to making our financial system fair, strong and efficient.
During her nine years at ob体育 as a Commissioner, Cathie has focussed on ob体育鈥檚 markets work. In particular, she has worked to address broader market integrity issues to support the continuation of well functioning markets, as well as encouraging a smooth LIBOR transition, and developing ob体育鈥檚 approach to climate-related risk.
She has been a great colleague, mentor and friend to many at ob体育 鈥� and she will be truly missed.
On Digital Transformation
As you may have seen it reported in the press lately, I have spoken about my ambitions for ob体育 to become a leader in digitally enabled regulation.
The disruptive potential of digital technologies is widely acknowledged 鈥� and it applies to regulation and regulators. For that reason, I see addressing the digital challenge as posing the biggest single risk for ob体育.
Technological change is transforming the sectors we regulate, and ob体育 must adapt and innovate 鈥� to keep pace.
New and emerging technologies and products, including the rapid expansion of cryptocurrencies and the increasing use of artificial intelligence in the financial services sector, are changing the landscape.
Without continued investment in technology and data capability, ob体育 runs the risk of its effectiveness being diminished and, at worst, of ob体育 becoming irrelevant over time.
The community should be able to access our services quickly and seamlessly, and industry should be able to interact with ob体育 efficiently. Our own work will also be optimised by using data and technology, including artificial intelligence, more effectively.
Our data strategy sets out our plans to improve our capabilities 鈥� including in data analytics, artificial intelligence and machine learning. Ultimately, this will transform the way ob体育 works.
Good data governance is a key challenge and responsibility for us, and we are focused on ensuring we have both the staff capability and the technological safeguards to enable and support effective data governance standards.
So, ob体育 is committed to a digital future. We will continue to engage with the market and the community to help us make the right strategic and design decisions in this rapidly evolving area.
On Climate-related disclosure
ob体育 continues to follow international developments on climate-related disclosure and participate in the IOSCO Task Force on Sustainable Finance alongside our peer regulators.
Globally, it鈥檚 been a big few weeks for climate-related disclosure.
In the U.K., as of yesterday, over 1,300 of the largest UK-registered companies and financial institutions are required by law to disclose climate-related financial information in line with the recommendations of the G20 Financial Stability Board鈥檚 Task Force on Climate-Related Financial Disclosures (TCFD).[1]
The newly formed International Sustainability Standards Board鈥檚 Climate-related Disclosure, exposure drafts, was published last week.[2]
In the U.S., on 21 March, the SEC proposed rule changes to require climate-related disclosures to meet investor needs and demands.[3]
In New Zealand, the Government recently passed legislation that will require around 200 entities to produce climate-related disclosures by around 2023.[4]
Domestically, more companies produce detailed climate-related disclosures in response to market expectations and growing awareness of these issues. ob体育 has encouraged listed companies with material climate-related exposures to report voluntarily under the recommendations of the TCFD. This has been our position since 2018.
Our surveillance work on climate risk disclosure and governance is ongoing.
We look forward to taking the Committee鈥檚 questions.
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