New Proposed Environmental Reporting Standards

In January, the Federal Government released the draft of the Treasury Laws Amendment Bill: Climate-related financial disclosure. It proposes a design of Australia’s mandatory climate reporting regime.  

Reporting Thresholds and Phased Implementation 

Which entities the proposed regime applies to will depend on the  entity’s consolidated revenue, consolidated gross assets, and number of employees. The table below is from Allens.  

 
 

Not Applicable to SMEs 

The proposed regime is expected to cover around 20,000 Australian organisations. However, it will not apply to SMEs below the relevant thresholds. 

Sustainability Report 

Entities will be required to submit a ‘sustainability report’. It will disclose greenhouse gas (GHG) emissions and information on climate-related risks, governance, strategies, and metrics.  

Tips to Prepare for the Proposed Regime 

First, determine whether the proposed regime will apply to you. In other words, do you fall into one of the three categories in the table above? 

If so, the following points are important:  

  • Develop robust internal processes for producing and verifying climate disclosures 

  • Update risk management frameworks to embed climate-related risk, governance, and verification, including greenwashing risk 

  • Address reliance on third party GHG emissions data, including how to access, analyse, and implement data disclosed from third parties (e.g. in the supply chain) 

  • Distinguish mandatory climate-related financial disclosures from existing other ESG disclosures 

  • Proactively engage with auditors on their evolving assurance requirements 

  • Stay up to date with developments – reporting requirements are likely to expand beyond climate disclosures to broader environmental sustainability matters 

See links below for further clarification and advice.  

Alicja Gibert