The corporate watchdog plans to check whether some of Australia's biggest companies have properly disclosed their risk from climate change.
The Australian Securities and Investments Commission on Monday updated its guidance to companies to help them disclose their climate change-related risks and opportunities.
Along with the new rules, ASIC said it planned to conduct "surveillances" of climate change-related disclosure practices by selected listed companies in the coming year.
The move followed a Senate inquiry report into carbon risk which was released in 2017.
Among the updated guidance is a note for companies to "highlight climate change as a systemic risk that could impact an entity's financial prospects for future years and that may need to be disclosed in an operating and financial review".
'While disclosure is critical, it is but one aspect of prudent corporate governance practices in connection with the mitigation of legal risks," ASIC commissioner John Price said in a statement.
"Directors should be able to demonstrate that they have met their legal obligations in considering, managing and disclosing all material risks that may affect their companies.
"This includes any risks arising from climate change, be they physical or transitional risks."
Climate risk for companies can be such things as assets being destroyed by cyclones, agricultural land being rendered useless by prolonged drought, disruption to supply chains, transition risks from moving to a low carbon economy, or liability risks where people who suffer damage from climate change seek redress from those they believe are responsible.
Australian Associated Press