Australia’s House of Representatives has officially passed the Treasury Laws Amendment bill, setting a new benchmark in climate accountability.
According to ESG Today, starting in 2025, large and medium-sized companies will be mandated to disclose their climate-related risks, opportunities, and greenhouse gas emissions throughout their value chains. This legislation, having secured Senate approval in August, represents a significant advancement in Australia’s environmental legislative framework.
Introduced in January 2024 by Treasurer Jim Chalmers, the new regulations align with the International Sustainability Standards Board (ISSB) standards recently issued by the IFRS Foundation. The Australian Accounting Standards Board (AASB) is gearing up to issue compatible climate disclosure standards, while the Australian Auditing and Assurance Board (AUASB) is set to develop assurance standards by late 2024.
Under the new law, initial reporting for large entities—those with over 500 employees or revenues surpassing $500m, and asset owners managing assets over $5bn—will commence in January 2025. Medium-sized firms will follow suit in July 2026, with smaller companies joining in 2027.
Furthermore, the legislation allows a phased-in reporting for Scope 3 emissions and offers a three-year litigation protection concerning these disclosures, reflecting a pragmatic approach to corporate environmental reporting.
The Australian Council of Superannuation Investors has lauded the passage of the legislation, recognizing the enhanced transparency it will bring to investor risk assessments. The investor group affirmed that the mandatory climate disclosures would integrate seamlessly into their investment processes.
Concurrent to the reporting standards, the Parliament has approved the creation of the Net Zero Economy Authority. This new body will guide Australia’s transition to a net-zero emissions economy by 2050, focusing on reskilling workers, fostering industry transformation, and attracting clean energy industries.
MP Patrick Gorman, Assistant Minister to the Prime Minister, heralded the establishment of the Authority as a pivotal support for communities transitioning to a sustainable future, highlighting the benefits for workers and regional development.
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