Australia’s House of Representatives has passed the Treasury Laws Amendment Bill, introducing mandatory climate-related reporting requirements for large and medium-sized companies. This marks a significant step in aligning Australia’s corporate landscape with global ESG standards and advancing its carbon neutral strategy. The new rules, starting as early as 2025 for the largest companies, mandate disclosures on climate-related risks, opportunities, and greenhouse gas emissions across the value chain. 

The legislation follows the framework set by the International Sustainability Standards Board (ISSB) and focuses on transparency for public and large proprietary companies with over 500 employees or $500 million in revenue. Medium-sized companies will start reporting in 2026, with smaller companies following in 2027. These mandatory disclosures aim to give investors clearer insights into climate risks, helping to integrate ESG factors into investment decisions. 

Australia has also established a new Net Zero Economy Authority, responsible for guiding the country’s economic transition to net zero by 2050. The authority will support reskilling workers in emissions-intensive sectors and help attract clean energy investments. This dual approach—combining mandatory reporting with economic transformation—is a key part of Australia’s commitment to reduce emissions by 43% by 2030, compared to 2005 levels. 

With this new climate disclosure law, Australia is setting a strong example in the Asia-Pacific region, signaling the importance of ESG-driven policies in achieving a sustainable future. The legislation also allows for phased-in Scope 3 emissions reporting, offering companies extra time to disclose value chain emissions, supporting a comprehensive carbon neutral strategy. 

Sources: 

https://www.esgtoday.com/australia-passes-law-to-begin-mandatory-climate-reporting-in-2025/ 

https://www.klgates.com/ESGAustralia-Mandatory-Climate-Related-Financial-Disclosures-Legislation-Passes-Parliament-9-11-2024#:~:text=On%2022%20August%202024%2C%20the,commencing%20after%201%20January%202025. 

https://www.allens.com.au/insights-news/insights/2024/09/mandatory-climate-related-financial-reporting-legislation/ 

https://www.bdo.com.au/en-au/insights/esg-sustainability/mandatory-climate-reporting-in-australia-starts-on-1-january-2025