The Australian Senate has passed a bill mandating climate reporting for large and medium-sized companies, marking a significant move towards a new climate risk disclosure framework in the country. Treasurer Jim Chalmers stated that these reforms provide the necessary clarity and certainty for investors and companies to support the net-zero transition and enhance Australia’s appeal to international capital. The legislation, introduced earlier this year, aligns with the International Sustainability Standards Board (ISSB) standards and requires companies to disclose climate-related risks, opportunities, and greenhouse gas emissions across their value chains. This mandatory climate disclosure is the first step in the Albanese government’s sustainable finance strategy, which includes the development of a sustainable finance taxonomy and a labeling regime for sustainable investments.
The law will initially apply to public companies and large proprietary companies meeting specific thresholds (500+ employees, $500 million+ revenue, or $1 billion+ assets), with reporting beginning in 2025. Small companies start two years later and small companies start one year later. The Australian Accounting Standards Board (AASB) and the Australian Auditing and Assurance Board (AUASB) are developing the necessary standards for climate disclosure, which should be completed by the end of 2024.