Our resource centre provides an overview of the Australian regulatory landscape highlighting the increasing focus of climate change and sustainability within financial reporting and helps you consider the reporting impacts. Discover the latest developments in sustainability reporting both globally and locally.
Climate change reporting insights
An overview of the Australian regulatory landscape and financial reporting trends for climate change and decarbonisation.
Our publications help organisations communicate the impact of climate in Annual reports and financial statements.
Climate reporting and related publications
- ISSB Sustainability Disclosure Standards webinar – October 2023
- ESG in executive remuneration
- Accounting for the Safeguard Mechanism (23RU-08)
- Sustainability Reporting Survey – December 2023
- Bank’s climate-related disclosures – June 2024
- Insurers' climate-related disclosures
- Sustainability linked financing – accounting considerations (22RU-10)
- Sustainable energy: Power purchase arrangements (22RU-08)
Climate change reporting FAQs
Frequently asked questions to help identify and address climate change impacts on your financial statements.
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Cross-cutting
- Net-zero commitments | When do you recognise a liability and how do you tell a connected story?
- Has your public net-zero statement resulted in a constructive obligation? [Video]
- What are net-zero commitments and how do they impact financial reporting?
- When must a provision be recognised for climate related commitments? [Video]
- How can climate-related risks and strategic decisions impact financial statements?
Emissions schemes
- What is the accounting and financial reporting consideration for emissions and green schemes?
- How do you account for emissions or ‘green’ schemes?
- What are the key accounting considerations for carbon credits generated under voluntary schemes?
- How do voluntary green schemes work?
- What are the key accounting considerations for green schemes in the airline industry?
- What do companies need to consider when incorporating ESG measures into executive pay packages?
- Does an emissions scheme create an obligation? [Video]
Assets
- What’s the impact on the discount rate used in testing non-current assets for impairment?
- What might a company that purchases carbon credits voluntarily need to consider?
- What’s the impact on useful lives and residual values of PP&E and intangible assets?
- What’s the impact on cash flow projections used for impairment testing of non-financial assets?
- What are the potential impacts on inventories?
Capital & Finance
- How do you account for different forms of government assistance?
- Do green bonds contain embedded derivatives?
- Do you have a lease of green technology?
- What are the potential impacts of leasing polluting assets?
- Do contracts between customers and wind farm operators contain leases? [Video]
Lenders
Climate change podcasts
Sustainability reporting developments
Understand the rapid and converging developments in sustainability reporting.
International developments
International Sustainability Standards Board
The IFRS Foundation is aiming to put sustainability reporting on the same footing as financial reporting through the establishment of a sister body to the International Accounting Standards Board. The International Sustainability Standards Board (ISSB) will develop baseline sustainability disclosure standards to enable globally consistent, comparable and reliable sustainability reporting using a building blocks approach. This approach will allow national and regional jurisdictions to build on that global baseline to set supplemental standards that serve their specific jurisdictional needs.
Read more about KPMG's Global Climate Change Reporting Centre >
Global sustainability reporting standards
Sustainability reporting continues to develop at a fast pace across the globe. Three different bodies are developing sustainability standards across the globe: the ISSB, the US Securities Exchange Commission (SEC) and the European Financial Reporting Advisory Group (EFRAG).
The ISSB published the first two IFRS® Sustainability Disclosure Standards (IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures) on 26 June 2023. The IFRS Sustainability Disclosure Standards are designed to meet the needs of all organisations, not just the most sophisticated. They provide a clear idea of what organisations need to report to meet the needs of global capital markets – providing investors with globally comparable information.
Read more about the new ISSB sustainability disclosures standards >
The EFRAG and SEC standard requirements share numerous commonalities with the ISSB standards, however there are a differences that are important to understand when organisations are required to, or are considering reporting under multiple frameworks.
Our Comparing sustainability reporting proposals guide provides further insight on some of the practical challenges you may encounter as you prepare for the new sustainability reporting standards.
Australian developments
Sustainability-related disclosures – heightened expectations for current reporting periods
Regulator and government activities in Australia continue to reinforce the increasing focus and heightened expectations surrounding sustainability reporting, particularly climate. Exposed organisations need to act now rather than later in considering their reporting and communications. In the absence of requirements mandating climate-related disclosures in Australia, the TCFD recommendations continue to be supported by all Australian standard-setters and regulators and are currently considered to be the basis for best practice disclosures in Annual Reports. The recently released AASB S2 Climate-related Disclosures – which will be mandatory in a phased approach for financial years beginning 1 January 2025 – has its basis in the TCFD recommendations.
Mandatory climate related-financial reporting required in Australia from December 2025
In early September 2024, the climate-related financial disclosures legislation was passed. The legislation is largely consistent with the Bill introduced to Parliament in March 2024. Mandatory reporting is for financial years beginning on or after 1 January 2025 (or later). This means:
- 31 December 2025 year ends will report first, and
- first mandatory reporting date for 30 June year ends will now be 30 June 2026.
The first Australian Sustainability Reporting Standards (ASRS) were also finalised in September 2024 by the Australian Accounting Standards Board (AASB) and comprise:
- AASB S1General Requirements for Disclosure of Sustainability-related Financial Information – a voluntary Standard
- AASB S2Climate-related Disclosures – a mandatory Standard.
AASB S1 and AASB S2 will be effective from 1 January 2025 and are applicable for both profit and not-for-profit entities.
AASB S1 and AASB S2 are aligned internationally to IFRS S1 and IFRS S2. The main difference to the ISSB™ Standards is that AASB S2 does not require the disclosure of industry-based metrics and reference to SASB Standards.
How KPMG can help
KPMG Australia's services related to sustainability and climate change reporting in financial statements.
Your climate change-related Annual Report disclosures under ASRS
Reporting climate change impacts in financial statements – how your climate change response impacts recognition, measurement and disclosures
Providing assurance over your climate change related disclosures throughout your Annual Report
Your sustainability and corporate reporting more broadly
Meet the team
Get in touch below.
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