Reporting Update 24RU-04
The climate-related financial disclosures Treasury Bill was introduced into Parliament on 27 March 2024: Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Bill) – see Schedule 4. Given the Parliamentary timetable, debate will be in May 2024 at the earliest.
The Bill is largely consistent with Treasury’s exposure draft legislation released in January 2024. The main change is that the commencement date for reporting is now proposed to be financial years beginning on or after 1 January 2025 (or later). Subject to Parliamentary processes, 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 not 30 June 2025.
Key requirements
The Bill is the culmination of a series of consultations and proposes amendments to the Corporations Act 2001 and the Australian Securities and Investment Commission Act 2001 covering the following:
- Reporting entities: those with Corporations Act Chapter 2M reporting obligations meeting prescribed thresholds
- Phasing: timing of first reporting based on size or level of emissions. The Bill has clarified that asset owners (registered schemes, registrable superannuation entities and retail CCIVs) are not Group 1 entities (even if they meet two of the three thresholds for a Group 1 entity). These entities will be Group 2 entities where the value of assets are $5 billion or more
- Reporting content: as required by Australian Sustainability Reporting Standards (ASRS), which includes Scope 3 emissions (with a first-year transition exemption proposed in the [draft] ASRS)
- Reporting framework: within a sustainability report in the annual report and lodged in accordance with current annual reporting requirements
- Assurance requirements: phased approach ending with reasonable assurance of all climate disclosures made from 1 July 2030 onwards
- Liability framework: modified liability approach for both directors and auditors to disclosures of Scope 3 emissions, scenario analysis, transition plans and climate-related forward-looking statements.
We support the Bill’s proposal of phased adoption of mandatory climate-related financial disclosures and are pleased to see the clarifications made as a result of comments raised on the draft legislation in January.
The AASB [draft] Australian Sustainability Reporting Standards continue to be the best point of reference on what will be required to be disclosed by entities captured by the reporting requirements of this Bill.
Further details are set out in this Reporting Update.
| The updated Treasury policy statement and feedback statement on the January 2024 consultation documents are expected to be published on the Treasury website, alongside the public submissions. |
Next steps
- Get familiar with the proposals for the ASRS Standards
- Get familiar with the Treasury Bill understand when the proposals apply to you.
- Follow the progress of the Bill through the Parliamentary process
- Follow the progress of discussions by the AASB on the [draft] ASRS
- Start planning – perform a gap analysis and create a roadmap to identify capacity constraints
- Reach out to your KPMG contact during your planning process
