Incoming: Climate Reporting. Are you ready?

As part of the Australian Government’s action toward ambitious climate goals (a 43% reduction in greenhouse gas emissions by 2030 and achieving net-zero emissions by 2050), a phased roll-out of new mandatory climate-related reporting regime will be enacted from 1 July this year (2024) to require businesses to report and disclose climate-related data relating to their operations.  This brings unprecedented change and increased expectation on businesses in terms of financial reporting, accountability and transparency.  

Climate-related reporting related to the disclosure of information related to a company's environmental impact, risks, and opportunities associated with climate change. It is a method of informing investor decisions, which encompasses both the immediate and long-term effects of climate change on business operations. 

While not every organisation will be required to respond to the regime, the impact of this will be felt across every organisation as the cascading effects are experienced through the supply chain and economy. For example, reporting companies may seek information from their suppliers to inform their Scope 3 GHG emissions; or they may place more stringent requirements for their suppliers to achieve act responsibly and provide data that helps to quantify impacts and demonstrate action.

While many businesses that are the focus of the initial roll-out phase (see below) have taken some steps toward readiness, research found that less than 40% of businesses that will be required to mandatorily report are prepared (RSM, 2023).  This figure does not consider businesses likely to be  impacted as a result of the cascading effects (predominantly SMEs). However, we know from our own Business Chamber Queensland Sustainability Maturity research that 53% of businesses are operating at only Compliance or below levels of Sustainability Maturity.

Currently there are three proposed phased roll-outs of the regulation: 

The Australian Accounting Standards Board (AASB) has released the Exposure Draft ED SR1 Australian Sustainability Reporting Standards – Disclosure of Climate-related Financial Information which will ultimately set the deporting Standards, in line with international reporting Standards.  The AASB is currently seeking comment on the Draft until 1 March 2024.

Want to be on the front foot, but don’t know where to start?

The most important thing that your business can be doing to prepare for incoming climate-related disclosure reporting is to define a baseline and start measuring and annually benchmarking your emissions data (see ecoBiz resource below). 

If you are an organisation that will be required to report, familiarise yourself with the ASSB reporting framework requirements and any specific obligations for your industry.

Once you have established a baseline, start to engage with stakeholders within the business and any suppliers or partners to determine their capacity to collect and provide any environmental data.

What resources are available to my business?

• If your business (or on of your suppliers) has 200FTE or less, Business Chamber Queensland can help you baseline and benchmark your data for free through our ecoBiz program
• If you are a Director and want to understand your responsibilities, the Australian Institute of Company Directors in Partnership with Deloitte and Minter Ellison have released a directors guide to mandatory climate reporting
• The AASB Exposure Draft Reporting Framework can be found here: AASB ED SR1. You can also provide feedback on the draft Standards via survey, Outreach event or comment via the AASB website
• See Business Chamber Queensland's Advancing Business Sustainability Report to learn more about Business Sustainability Maturity levels in Queensland.