Sustainability reporting

Developing strong sustainability reporting processes for voluntary and mandatory sustainability reporting.

Sustainability is becoming an increasingly pressing consideration for Australian businesses. This shift is driven by several factors: mandatory sustainability reporting is coming into force, the government has set emissions reduction targets, and entities are receiving increasing requests for sustainability-related data from investors, customers and creditors.

From 1 January 2025, mandatory sustainability reporting has been a requirement in Australia and is being phased in over the following three years based on entity size. Most mid-market entities will be required to prepare an annual sustainability report.

The sustainability report must be compliant with the new standard AASB S2 Climate-related Disclosures, and it will provide information to investors about climate-related risks and opportunities that could reasonably be expected to affect an entity’s cashflows, access to finance, or cost of capital over the short, medium, and long term.

What are the implications for finance teams?

Finance teams will be expected to understand and apply this new standard, and we can provide the specialist expertise to guide them through the process. We can offer support with the technical requirements of AASB S2, integrating climate-related information into financial reporting processes and co-ordinating across sustainability and finance teams which often have differing modus operandi.

As the reporting requirements become applicable for your entity, it is important that you receive the most up-to-date, technically accurate and practical support to give you confidence that your reporting meets the needs of primary users and is sufficiently documented for assurance providers.

Who is caught by Australian statutory sustainability reporting?

Recent legislative changes to the Corporations Act now require preparation of an annual sustainability report for entities meeting certain criteria

• Entities that prepare annual reports under Chapter 2M of the Corporations Act; and

Either

• Meet any two of three thresholds as shown in the table below; or
• Are a registered corporation under the NGER Act, or an entity required to register under the NGER Act; or
• Are a registered scheme, registrable superannuation entity, or retail corporate collective investment vehicle (CCIV), with consolidated assets in excess of the threshold shown in the table below.

NB - The criteria for entities in scope of the legislation is contained in section 292A of the Corporations Act. If you are not certain if your organisation is in scope of the legislation, please seek legal advice.