Australia steps closer to mandatory climate reporting
August 29th, 2024
The Australian senate has passed a bill to introduce mandatory climate reporting for large and medium-sized companies as part of the government’s sustainable finance strategy.
Senators voted 34-25 to support the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, which will require companies to disclose climate-related risks and opportunities and greenhouse gas emissions across the value chain.
It establishes a national framework for climate risk disclosure, introducing standardised reporting requirements to ensure businesses provide high quality climate related financial disclosures.
The mandated disclosures are broadly in line with the IFRS Foundation’s International Sustainability Standards Board’s recently introduced standards.
The reporting requirements will start from January 1, 2025, for Australia’s largest listed and unlisted companies and financial institutions, while other large businesses will be phased in over time.
It will initially apply to all public companies and large proprietary companies that are required to provide audited financial reports to the Australian Securities and Investment Commission and have over 500 employees, revenues over $500 million or assets over $1 billion.
In 2027, this expands to medium-sized companies with over 250 employees, over $200 million revenue and more than $500 million in assets. Then in 2028, for smaller companies with over 100 employees, more than $50 million in revenue and over $25 million in assets.
The Australian Accounting Standards Board is currently in the process of developing the climate disclosure standards for Australian companies, which are expected to be issued shortly.
Treasurer Jim Chalmers said: “These critical reforms provide investors and companies the clarity and certainty they need to support the net zero transformation and further strengthen Australia’s reputation as an attractive destination for international capital.”
Last Updated: 29 August 2024