Changes come into effect from 1 January 2025
The Australian Government has officially introduced mandatory sustainability reporting, marking a significant shift in corporate responsibility and transparency. The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill was passed on 9 September 2024, with the new requirements set to come into effect from 1 January 2025. This new legislation means that many Australian entities will need to include sustainability reports, initially focused on climate-related disclosures, in their annual financial reports.
Who Needs to Report?
Not all entities are required to comply with mandatory sustainability reporting immediately, as there is a phased introduction based on entity size and type. To determine if your organisation needs to submit a sustainability report, entities must meet specific criteria related to size, revenue, or greenhouse gas emissions. For example, large proprietary companies, listed entities, and National Greenhouse Energy Reporting (NGER) reporters will need to comply. Smaller companies may be exempt unless they fall within the outlined thresholds, such as having over $50 million in revenue or emitting more than 50,000 tonnes of CO2 equivalent annually.
What Will Be Included?
Initially, mandatory sustainability reports will focus solely on climate-related information, requiring companies to disclose any material financial risks and opportunities related to climate. This includes Scope 1, 2, and 3 greenhouse gas emissions, strategies for addressing climate risks, and targets set for reducing these risks. As the legislation evolves, it will expand to cover additional sustainability topics such as biodiversity and nature, aligning with international standards.
The sustainability report must also include detailed climate statements and any associated notes, which will be audited to ensure accuracy. Entities will need to submit these reports alongside their financial statements to the Australian Securities and Investments Commission (ASIC) and present them at their Annual General Meetings (AGMs).
Why Does It Matter?
Mandatory sustainability reporting is an important step forward in ensuring transparency and accountability when it comes to environmental impact. For businesses, this shift not only encourages more responsible practices but also provides the opportunity to showcase their commitment to sustainability. With climate risks becoming an increasingly urgent global issue, investors, customers, and regulatory bodies alike are demanding more detailed and accurate disclosures.
How We Can Help
Navigating the new regulations can be complex, but rest assured, we are here to guide you through the process. Our Goldman Travel team is fully prepared to assist you in understanding the criteria, preparing your sustainability reports, and ensuring that your business meets all necessary obligations under the new legislation.
