The Australian Senate has passed a bill requiring large and medium-sized companies to report on climate-related risks, marking a significant step toward establishing a new climate risk disclosure framework in the country. The legislation aligns with the International Sustainability Standards Board (ISSB) standards and mandates disclosures on climate risks, opportunities, and greenhouse gas emissions across the value chain. This bill is the first step in the Albanese government’s Sustainable Finance Roadmap, introduced in June, which aims to develop financial markets to support the transition to a net-zero economy. Other priorities under the Roadmap include creating a sustainable finance taxonomy and a labeling regime for sustainable investments.
The legislation will initially apply to public companies and large proprietary companies meeting specific size thresholds, such as those with over 500 employees, revenues exceeding $500 million, or assets over $1 billion. These companies will begin reporting in 2025. Mid-sized companies are defined as companies with more than 250 employees, more than $200 million in revenue, or $500 million in sales. real estate, starting two years later, and small companies the following year. The Australian Accounting Standards Board (AASB) is developing accounting standards that are expected to be published soon, while the Australian Auditing and Assurance Board (AUASB) is working on assurance standards for these expected disclosures. by the end of 2024.