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[title] => Mandatory climate reporting begins for Australia’s largest emitters
[alias] => mandatory-climate-reporting-begins-for-australia-s-largest-emitters
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The framework will eventually cover thousands of companies to encourage net-zero investment and address financial risks from climate change.
[fulltext] =>
The country’s largest emitters must make climate-related disclosures in their annual report under new rules starting Wednesday to encourage investment in the transition to a net-zero economy.
It comes six months after the reporting regime was originally scheduled to take effect, with Treasury pushing back the start date to 1 January to grant companies more time to prepare and the AASB to finalise disclosure standards.
The companies that will be affected first are known as “group 1 reporters” that meet certain two out of three threshold requirements: 500 employees, $500 million in revenue or $1 billion in assets.
They will be forced to report on their climate governance, strategy and greenhouse gas emissions, including scope 1 and 2 emissions from this year.
Reporting on supply chain emissions (scope 3) will follow in 2026.
The framework is expected to expand and cover thousands of companies, organisations and financial institutions at the end of its three-year rollout period.
According to the government, the framework would strengthen Australia’s reputation as an investment destination while helping regulators manage systemic financial risks linked to climate change.
It featured “standardised, internationally‑aligned reporting requirements for businesses, to ensure they are making high quality climate‑related financial disclosures”, Treasurer Jim Chalmers said when introducing the rules to Parliament last year.
“A rigorous, internationally‑aligned and credible climate disclosure regime will support Australia’s reputation as an attractive destination for international capital and incentivise investment in the energy transformation,” he said.
The amendments containing the new rules passed Parliament on 9 September and received royal assent on 17 September.
Companies and their directors that failed to comply could be subject to legal action from ASIC, with private litigants exempt from suing during the first three years of the regime.
ASIC commissioner Kate O’Rourke said the corporate regulator would take “a proportional and pragmatic approach to supervision and enforcement” as companies adjusted to their new obligations.
“This is a significant reform that will have far-reaching implications for many of our key stakeholders,” she said.
“ASIC recognises there will be a period of transition as organisations develop the capabilities required to comply.”
“Enhanced climate disclosure will also benefit reporting entities themselves, enabling them to better understand their climate-related risks and opportunities over the short, medium and long term.”
A review of the regime is planned for 2028.
It would examine the effectiveness of coverage setting, appropriateness of the liability framework and whether there were any other barriers affecting the company’s ability to make quality disclosures, the government said.
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