The International Sustainability Standards Board (ISSB) has now finalised and released their inaugural standards relating to sustainability and climate related disclosures:
- IFRS S1 – General Requirements for Disclosure of Sustainability-related Financial Information
- IFRS S2 – Climate-related Disclosures
Treasury consultation paper
Treasury has released a second consultation paper this week on Climate-related disclosures in Australia. Detailing plans to implement mandatory climate-related financial disclosure requirements for companies and financial institutions and seeking feedback on the proposed reporting rules.
In a statement announcing the launch of the new consultation, Australian Treasurer Jim Chalmers said:
“The consultation paper released today is the next step in delivering the Government’s commitment to ensuring Australia’s large business and financial institutions provide more information and greater transparency on how they are responding to climate change and contributing to the net zero transformation.”
Proposed start dates
The proposal seeks to require companies to make climate-related disclosures from 2024/25 onwards depending on company size.
Table: thresholds for climate related reporting commencement dates.
| 2024/25 | 2025/26 | 2026/27 | |
| Employees | 500 + | 250+ | 100+ |
| Revenue | >$500 million | >$200 million | >$25 million |
| Assets | >$1 billion | >$500 million | >$50 million |
For those entities required to report under the NGER Act, reporting will commence in 2024/25.
Under the proposal, companies would be required to disclose information about:
- Scope 1 and 2 emissions for the reporting period.
- Governance processes, controls and procedures that have been implemented to monitor and manage climate-related financial risks and opportunities.
- Any climate-related targets and progress towards these targets.
Companies will be provided an exemption from reporting scope 3 emissions in the first reporting period to build capability in calculating scope 3 emissions. However, from the second reporting period onwards, scope 1, 2 and 3 emissions will need to be reported.
The consultation paper stated:
“The Government has committed to ensuring large businesses and financial institutions provide Australians and investors with greater transparency and accountability when it comes to their climate-related plans, financial risks, and opportunities. As part of this commitment, the Government will introduce standardised, internationally-aligned reporting requirements for businesses to make disclosures regarding governance, strategy, risk management, targets and metrics – including greenhouse gasses.”
The consultation period for the above concludes on 21 July 2023, and would then see the preparation of the Exposure Draft and eventually the AASB climate disclosure standards.
Click here to access the consultation paper.
If you have concerns with how the proposed mandatory climate reporting requirements will impact your business, please get in contact.
