The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth) has officially passed Federal Parliament and received Royal Assent in September 2024. New requirements outlined in the amendment are set to come into effect from January 1 2025[1]. This new bill aims to align Australia with global efforts to improve transparency around climate risks and their financial impact.

So, what does this change mean for you and your business?

What is the Treasury Laws Amendment Act?

This legislation outlines new mandatory climate reporting for businesses across Australia. This means that specific businesses are required to prepare annual sustainability reports that disclose climate-related financial impacts[1].

Who must report?

Australian based businesses that meet the legislation’s requirements will be required to report.

For large businesses, financial institutions, superannuation entities, and certain investment schemes, reporting is required if they meet specific thresholds depending on which phase of implementation the business falls into.

These thresholds are not limited to, but may include businesses that have:

• Consolidated revenue of $50 million or more
• EOFY consolidated gross assets worth $25 million or more, and
• EOFY employee count of 100 or more[1]

Entities emitting over 50,000 tons of CO2 equivalent (Scope 1 and 2 emissions) under the National Greenhouse and Energy Reporting (NGER) scheme are also mandated to report their climate-related financial disclosures[1].

Smaller entities that are below the outlined thresholds, or have certain exemptions such as charities, are not required to comply under these new requirements.

When do I need to start reporting?

This legislation is adopting a phased implementation approach, which means mandatory reporting may begin at different times for different businesses.

Starting from the 2025 financial year, large entities will need to comply with the new reporting requirements. Other businesses will be gradually phased in by 2027 depending on the size of the business and emissions.

For example, entities with over $500 million in revenue or more than 500 employees will report first, while smaller entities with $50 million in revenue or 100 employees will follow and be mandated by 2027[1].

What do I need to report?

The new requirements mean businesses must disclose climate-related risks, including emissions (initially Scopes 1 and 2, and then eventually Scope 3).

Scope 1 emissions are direct greenhouse (GHG) has emissions from sources that are owned or controlled by an organisation. This includes company owned vehicles, on-site fuel combustion or industrial processes.

Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat or cooling for use. For example, if your business purchases electricity from a coal burning power plant, the emission from burning coal is considered as Scope 2 emissions.

Businesses must also provide scenario analyses assessing the impact of climate change under various temperature increase scenarios – for example, the different impacts between a 1.5°C increase and 2°C increase[2].

In addition to annual sustainability reports, these disclosures must also be included in annual financial reports and prepared following the Australian Sustainability Reporting Standards (ASRS)[3].

Are there any changes to assurance and liability?

Under the terms of this legislation, all climate-related financial disclosures will require independent assurance, beginning with a “reasonable assurance” level for all material disclosures, by 2030[3].

A modified liability framework will be put in place to limit the exposure of directors and auditors when reporting Scope 3 emissions and potential future climate scenarios.

Why did these changes take place?

Amendments to the original Treasury Laws Act were made to align Australia with other global initiatives to improve transparency around climate risks and their financial impacts.

This new legislation is designed to increase corporate accountability for environmental impact, and ultimately ensure Australia’s corporate reporting is consistent with international sustainability standards.

How can Blue NRG help?

At Blue NRG, we’re committed to supporting sustainable energy solutions for businesses. We’re excited to see initiatives like this take shape to ensure a greener future for Australia’s energy sector. The graph below, is a customer report created with Blue NRG’s Insight tool, giving business owners easy access to their carbon emission and energy usage.

Our services include GHG emission reporting and tailored solutions to offset carbon footprints, enabling businesses to meet their sustainability goals. The graph below showcases a customer report generated using Blue NRG’s Insight tool, which provides business owners with a seamless way to access their carbon emission and energy usage data.

Business owners can utilise this information to help reporting and presenting to management or shareholders. For assistance in mandatory reporting contact us on 1300 599 888 or info@bluenrg.com.au.

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