The government introduced a bill to parliament on 27 March, outlining amendments to the proposed climate reporting legislation.
If passed, reporting requirements for Australia’s largest listed and unlisted companies and financial institutions would commence from 1 January 2025, instead of 1 July this year as previously intended, Treasurer Jim Chalmers confirmed. Requirements for other large businesses would be phased in over time.
Under the proposal, Australia’s largest companies would need to disclose their climate-related risks and opportunities, including scope 1 and 2 greenhouse gas emissions, within annual sustainability reports. Scope 3 emissions reporting would be required from the following year.
“This legislation will introduce standardised, internationally‑aligned reporting requirements for businesses, to ensure they are making high-quality climate‑related financial disclosures,” Chalmers said.
Business Council of Australia (BCA) chief executive Bran Black said the BCA supported the implementation of climate financial reporting to better enhance investment decisions in projects linked to Australia’s net zero transition.
“Investors and shareholders need certainty and visibility, that companies are managing their climate risks in line with international standards and that projects support the move to cheaper and cleaner alternatives,” Black said.
“The commencement of the start of 2025 will also give time to some of the nation’s largest companies to adjust to the climate reporting standards.”
The Australian Institute of Company Directors (AICD) also welcomed a “staged and sensible” approach to the new climate reporting regime.
AICD managing director and CEO Mark Rigotti said the regulatory reform was “extremely complex and challenging”, highlighting that the scale of the task ahead “cannot be overstated”.
“This move to mandatory climate reporting is a generational shift that will need to be carefully managed, requiring extensive up-skilling across boards, organisations, the audit profession and the economy as a whole,” Rigotti said.
“We need to get this right and encourage a strategic rather than compliance-based mindset.”
The bill has been referred to the Senate Economics Legislation Committee for review and report by 30 April 2024.
Photo by Chris Liverani (Unsplash).
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