20/03/2024
Draft legislation on mandatory climate related disclosures closed for comment on 1 March 2024. Proposed mandatory climate related disclosure laws are likely to be introduced for large businesses, which will include disclosure obligations around climate related financial risks, opportunities, plans and strategies. It is expected that reporting obligations will be phased in, initially only to apply to large businesses but then businesses that meet at least two of the following criteria:
- consolidated revenue of $50 million or more,
- consolidated gross assets of $25 million or more, or
- employees numbering 100 or more.
This criterion will mean most small to medium businesses will be excluded from the reporting obligations. However, these are organisations that may be caught where they are part of the supply chain of larger businesses, which could see small to medium business providing information on their emissions. Businesses will need to develop the capability to report on emissions and be prepared to meet new proposed standards.
These reporting obligations will only come in from the second year of reporting, and ASIC intends to release guidance for small business in relation to the requirements of the new laws and how the new laws may impact them.
Government climate related financial disclosures
By the end of the 2027 financial year, all Commonwealth agencies and entities will be required to make climate-related financial disclosures. These obligations are expected to mirror the obligations for businesses. The roll out of the new obligations has already commenced, with a pilot program currently under way and the obligations expanding next financial year to capture a broad range of Commonwealth agencies and entities with the bulk of agencies required to comply for the year ending 30 June 2026. The Commonwealth Climate Disclosure Requirements are still under development but are expected to align with international standards.
These reporting obligations are also likely to impact organisations that contract with the Commonwealth, and we expect they will become part of tendering and contract conditions.
Organisations that work with government and business should keep abreast of these changes, ready to make changes to practices and reporting once implemented.
Griffin Legal can assist in planning for these changes and keeping you up to date on these reforms.