Mandated Reporting in Australia: A step by step guide for businesses
A transformative change in climate reporting
Australia is stepping up its climate accountability. On 9 September 2024, the Australian House of Representatives passed landmark legislation mandating climate-related financial disclosures for Group 1 organisations that meet at least two of the following criteria:
- Annual consolidated revenue of AUD $500 million or more
- AUD $1 billion or more in EOFY consolidated gross assets
- 500 or more employees
Entities exceeding thresholds under the National Greenhouse and Energy Reporting (NGER) scheme will also need to comply. Reporting kicks off for periods starting on or after 1 January 2025, with submissions for June year-ends due by 30 June 2026. Smaller organisations will phase in later.
This guide breaks down Australia’s new climate reporting framework, global trends in ESG reporting, and actionable steps to help organisations get ready for this transformative change.
A global snapshot: climate-related reporting in action
Europe: The EU leads the charge with the Sustainable Finance Disclosure Regulation (SFDR) for financial markets and the Corporate Sustainability Reporting Directive (CSRD) extending these requirements to non-listed companies.
United States: While legal debates surround the SEC’s March 2024 climate disclosure rules, many U.S. companies have already embraced international ESG standards like GRI and TCFD to stay ahead of global expectations.
Corporate Pioneers: Companies such as Microsoft and Coca-Cola exemplify best practices by aligning their reporting with global frameworks, including the UN’s Sustainable Development Goals (SDGs) and GRI standards.
Australia’s approach to climate-related disclosures
Australia is tailoring the ISSB’s IFRS S2 Climate-related Disclosures Standard into the Australian Sustainability Reporting Standards (ASRS). These standards reflect Australia’s unique emissions reporting methodologies and climate commitments, including a 43% reduction in greenhouse gas (GHG) emissions by 2030 and achieving net-zero by 2050.
Reporting Timeline:
- Year One: Governance, strategy, risk management, and metrics (Scope 1 and 2 emissions).
- Year Two: Inclusion of Scope 3 emissions.
- 2027 Onwards: Climate resilience assessments, leveraging scenario analyses aligned with the Climate Change Act 2022.
These disclosures aim to enhance transparency, attract international investors, and align Australia with global leaders like the EU, UK, and New Zealand.
Phased rollout of reporting obligations
The framework introduces a phased approach:
- 2025: Group 1
- AUD $500M+ revenue, AUD $1B+ assets, or 500+ employees
- 2026: Group 2
- AUD $200M+ revenue, AUD $500M+ assets, or 250+ employees
- 2027: Group 3
- AUD $50M+ revenue, AUD $25M+ assets, or 100+ employees
Charities registered under the ACNC and small businesses are exempt.
Adapting to Australia’s evolving regulatory landscape
The reporting framework is dynamic, with ongoing developments including:
- Adjusted thresholds for group classifications.
- Phased audit requirements.
- New guidelines for assessing climate resilience under global warming scenarios of 1.5°C and 2.5°C.
The Australian Accounting Standards Board (AASB) and Auditing and Assurance Standards Board (AUASB) are finalising standards to ensure compliance and support organisations through these changes.
How to prepare for mandatory climate reporting
- Understand the Rules: Identify your organisation’s thresholds and ensure all stakeholders are aware of their obligations.
- Form a Cross-Functional Team: Engage experts from finance, operations, risk, and strategy to guide your reporting process.
- Create an ESG Roadmap: Perform a gap analysis to evaluate current capabilities. Start collecting data across teams, using tools that centralise and streamline the process.
- Invest in Reporting Technology: Leverage ESG platforms to automate data collection, maintain audit trails, and adapt to evolving standards.
Why this matters
Mandatory climate disclosures mark a turning point for Australian businesses, driving transparency and resilience while boosting Australia’s profile as a sustainable investment hub.
Eco-shaper’s ESG platform simplifies the journey, helping organisations navigate complex compliance requirements with confidence. Ready to future-proof your reporting?
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Book a demo of eco-shaper’s ESG platform today.
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