Australia's Parliament passed the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 on 9 September 2024, introducing mandatory climate-related financial disclosures for large entities and establishing a phased implementation schedule. The legislation applies to Group 1 entities — the largest companies within scope — for financial years commencing on or after 1 January 2025.
The disclosure framework will be built around Australian Sustainability Reporting Standards set by the Australian Accounting Standards Board, whose climate standard is aligned with the International Sustainability Standards Board's IFRS S2. From the first reporting year, covered Group 1 entities will be required to disclose Scope 1 and Scope 2 greenhouse gas emissions along with information about climate-related financial risks, the governance arrangements through which those risks are overseen, and the strategies in place to manage climate-related opportunities and exposures over the short, medium, and long term.
THREE-TIER PHASE-IN COVERS ENTITIES OF VARYING SIZES
The legislation establishes a three-tiered rollout. Group 2 entities will begin reporting for financial years starting on or after 1 July 2026, while Group 3 entities follow from 1 July 2027.
ASIC TO OVERSEE COMPLIANCE
The Australian Securities and Investments Commission is the primary enforcement body responsible for monitoring compliance with the new disclosure obligations among listed entities and other large reporting entities within its jurisdiction. ASIC has been active in recent years in pursuing greenwashing cases — instances where entities misrepresent the environmental credentials of their products or activities.