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| Whether reporting in Australia or another jurisdiction, the step up in disclosure requirements is significant. To help your business understand its readiness, Energetics has developed two self-assessments. One is for companies reporting under the Australian Sustainability Reporting Standard (ASRS). The second is for companies which need to assess readiness under the standards of the International Sustainability Standards Board (ISSB). |
Mandatory climate-related financial disclosures: What are they, who's required to report and where's the opportunity?
The incoming mandatory reporting requirements have been described as "the biggest changes to financial reporting and disclosure standards in a generation."
This is not only about reporting energy and emissions; it is about reporting on the transition your company needs to make by 2050 to be net zero, and the impact climate risk will have on financial performance, and the opportunities these changes represent to your company.
So, who has to do it, when do they have to do it, and where's the opportunity?
Implementation will be phased according to the thresholds shown in the chart. It is important to note that both listed and unlisted entities that meet these criteria will fall within the scope of mandatory climate disclosures.
Companies will need to disclose against requirements relating to climate governance throughout the company, climate risk (physical and transition) and opportunities, emissions (scope 1 and 2 initially and scope 3 in the second year) and their transition plans including emissions reduction targets, metrics and how the businesses strategy is informed by climate-related matters.
The requirements increase over time. For instance, initially qualitative assessments are allowed for climate risk but these move to quantitative by end state. Additionally, the level of assurance also increases over time.
Disclosures are due at the same time as financial reports and are contained within a Sustainability Report. In Australia, for the majority of Group 1 reporting companies, this will be the end of September 2026.
Requiring companies to assess their climate risk and develop transition plans for a low carbon economy will help make economies resilient to the impacts of climate change.
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