Businesses urged to prepare for Australia’s mandatory climate reporting
Businesses urged to prepare for Australia’s mandatory climate reporting
The Australian Government’s new mandatory climate reporting legislation will take effect from 1 January 2025, marking a pivotal shift for businesses across the country.
Under the new laws businesses required to lodge financial reports with the Australian Securities and Investments Commission (ASIC) will also need to prepare and lodge sustainability reports relating to climate-related disclosures.
This includes evaluating their exposure under both high and low global warming scenarios, ensuring a thorough analysis of potential risks.
BDO's national leader of sustainability, Aletta Boshoff, said the changes offer significant opportunities for companies who adopt them early.
“The introduction of mandatory climate reporting presents a significant opportunity for businesses to enhance their strategic planning and risk management,” Aletta said.
“Companies that proactively adapt to these new requirements will not only ensure compliance but also build resilience and attract investors seeking sustainable practices.”
Under the new regulations, entities will be categorized into three groups, with Group One entities required to start reporting for the year ending 31 December 2025.
Group Two and Group Three entities will follow in subsequent phases.
Aletta said it’s crucial for businesses to understand their reporting timelines and prepare accordingly to avoid last-minute compliance issues.
“Now is the time for businesses to begin integrating these climate reporting requirements into their operation she said.
“Early preparation will provide a competitive edge and demonstrate commitment to responsible business practices.”
The legislation mandates reporting against both a 1.5-degree warming scenario and a higher-risk scenario. This ensures that companies consider both transition and physical climate risks, leading to more informed decision-making and strategic planning.
“For businesses, this is a clear call to action. Aligning with the new climate reporting standards will not only facilitate regulatory compliance but also enhance market positioning and investor confidence.
“Companies should start evaluating their climate risk management strategies and prepare to meet these upcoming requirements effectively.”
For media enquiries:
Tate Papworth
Manager, Media
E: tate.papworth@bdo.com.au
Ph: 0433 411 189