Australia signs off climate disclosure requirements

Government rubber stamps rules that will begin to apply from 2025, including scenario analysis

The Australian Government has signed off on mandatory climate reporting for large and medium-sized companies.

The House of Representatives voted on Monday to approve rules that will see the country’s largest firms required to explain their climate performance in their annual reports for 2025.

The rules are based on climate expectations recently developed by the International Sustainability Standards Board (ISSB).

A national body, known as AASB, is developing the final standards, which will consider ISSB’s requirements in the Australian context. Assurance standards will follow by the end of the year.

The regime will be phased in over the next three years.

Companies with revenues of A$500+, assets of A$1bn, or more than 500 employees will be required to comply from the financial year commencing January 2025.

Companies half that size will be covered from July 2026, and smaller companies from July 2027.  

A year after the starting date for each tier, relevant companies will need to include disclosures about their Scope 3 emissions.

Last month, the proposals were updated to include a requirement for entities to conduct scenario analysis using at least two relevant climate trajectories, one of which must be a scenario that leads to a low-carbon economy.