Large Australian businesses have less than four months to ensure systems are in place to produce mandated climate-related reports.
Australian Securities and Investments Commission (ASIC) Commissioner Kate O’Rourke said from January 1, 2025, many large Australian businesses and financial institutions needed to prepare annual sustainability reports containing mandatory climate-related financial disclosures.
Commissioner O’Rourke said the enabling legislation, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth), passed Federal Parliament on September 9 and received Royal Assent this week.
She said entities captured by the rollout needed to proactively engage with these mandatory climate reporting requirements.
“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 January 1, 2025,” she said.
‘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.”
Commissioner O’Rourke said ASIC had established a dedicated sustainability reporting page on the ASIC website to provide information about the new regime and how ASIC would administer it.
“We encourage reporting entities to refer to this page as an ongoing resource as it will be updated with further information and regulatory guidance.”
She said as more people considered environmental sustainability when making financial decisions, climate disclosure would 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.”
Commissioner O’Rourke said the mandatory climate reporting requirements would be phased in over the next three years, across three groups of reporting entities.
She said the first group of reporting entities were ones that met two of the following three criteria:
- Consolidated revenue: $500 million or more.
- EOFY consolidated gross assets: $1 billion or more.
- EOFY employees: 500 or more.
