For the first time, Australian company directors have nominated climate change as a number one issue for the Federal Government.

The Australian Institute of Company Directors’ (AICD) biannual Director Sentiment Index - a survey of 1,252 public and private company directors in September this year - shows directors are aware of the risks of climate change.

They also acknowledge that they may be held liable for failing to act in the future.

The Australian Securities and Investment Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have both sounded warnings about the threat of climate change and its risks to companies.

ASIC Commissioner John Price warned directors earlier this year that they “would do well” to carefully consider the 2016 legal opinion by Noel Hutley SC and Sebastien Hartford-Davis, which found companies could face lawsuits for failing to consider the risks of climate change.

The advice commissioned by the Centre for Policy Development (CPD) and the Future Business Council, “appears legally sound and is reflective of our understanding of the position under the prevailing case law in Australia in so far as directors' duties are concerned”, Mr Price said.

Similarly, APRA executive Geoff Summerhayes noted late last year that “should extreme weather events become more frequent and intense as scientists predict”, it could lead to “adverse economic impacts”.

ASIC has been meeting with company directors to discuss how to report climate change risks.

“They're acutely aware that there are potential reporting requirements coming through and that's helped to focus their minds,” AICD managing director Angus Armour said.

The AICD survey is accessible here.