(27 September 2024 – Australia) In one of the most significant reforms to corporate financial reporting in Australian history, Australia has officially passed laws that will introduce a mandatory climate-related financial disclosure regime from 1 January 2025.
Many entities are required to comply with the regime’s reporting requirements from that date with phased implementation for other entities in 2026 and 2027.
Entities subject to the regime will be required to prepare and disclose a “sustainability report” for each financial year, have the sustainability report audited by the auditor of the financial report and both keep and make available to regulators or persons entitled to inspect when requested, sustainability records that correctly explain and record the preparation of the “substantive provisions” of the sustainability report.
The Australian Securities and Investments Commission is urging entities captured by the rollout to proactively engage with these mandatory climate reporting requirements. To assist reporting entities, ASIC has established a dedicated sustainability reporting page on the ASIC website to provide information about the new regime and how ASIC will administer it.
“Large businesses and financial institutions should ensure that they implement appropriate governance arrangements and sustainability record-keeping processes ahead of the mandatory climate reporting requirements taking effect from 1 January 2025” stated AISC Commissioner Kate O’Rourke.
“This is a significant reform that will have far-reaching implications for many of our key stakeholders. ASIC recognises there will be a period of transition as organisations develop the capabilities required to comply. We will take a proportional and pragmatic approach to supervision and enforcement as industry adjusts to these new requirements.”
“As more people consider environmental sustainability when making financial decisions, climate disclosure will continue to grow in importance. Enhanced climate disclosure will also benefit reporting entities themselves, enabling them to better understand their climate-related risks and opportunities over the short, medium and long term.”