Roadmap puts climate-related financial disclosures in the spotlight
The Australian Government is taking significant steps to enhance climate-related financial transparency.
The launch of the Australian Government’s Sustainable Finance Roadmap (Roadmap) on 19 June 2024, aims to empower companies and investors, enabling them to make informed investment decisions, effectively manage climate and sustainability risks, and support the transition toward net-zero goals.
The Roadmap features three pillars, outlining how to improve transparency on climate and sustainability, enhance financial system capabilities and the role the Australian Government can play in leadership and engagement.
This article provides an overview of Priority 1: Implementing climate-related financial disclosures.
The Australian Government is taking significant steps to enhance climate-related financial transparency.
Legislation before Parliament mandates climate-related financial disclosures for large businesses and financial institutions. These disclosures aim to provide investors with more transparent and comparable information about entities’ exposure to climate-related financial risks and opportunities, and their climate-related plans and strategies.
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Pending the passage of legislation, reporting requirements will apply to Australia’s largest companies, financial institutions and entities exceeding the National Greenhouse and Energy Reporting (NGER) scheme’s publication threshold.
Starting from 1 January 2025, these entities will need to comply with the disclosure requirements, which will be guided by the Australian Accounting Standards Board (AASB).
The AASB aims to finalise climate disclosure standards by August 2024, well before the reporting obligations. The Australian Auditing and Assurance Board (AUASB) is also developing assurance standards for a phased introduction.
Next steps:
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- The AASB aims to finalise climate-related disclosure standards by August 2024.
- The AUASB will develop assurance standards for climate by late 2024, aligned with international assurance standards released in September 2024.
- ASIC will engage with reporting entities to facilitate compliance with climate disclosure requirements, issue guidance, and assess the impact on existing financial reporting relief.
- The Government will conduct further consultation on consolidating financial reporting bodies and reviewing climate-related financial disclosure requirements in 2028-29, led by the Treasury and in collaboration with the Council of Financial Regulators (CFR) and the new financial reporting body.
Key reform timeline
Source: The Australian Government the Treasury
The Roadmap and more information can be found on the Treasury website.
How BDO can help
Don’t wait until legislation is final – start engaging in the process to ensure you have enough time to develop the data and capabilities needed to prepare any climate-related reporting.
Our sustainability reporting team can help you understand what this means for your organisation, contact us today.
