Climate change isn’t just a buzzword anymore—it’s a reality that’s reshaping how businesses operate. With growing expectations for transparency and accountability, Mandatory Climate Reporting in Australia is becoming the new norm. It’s all about making sure businesses report their environmental impact and show how they’re tackling climate-related risks. If your business needs to get up to speed, here’s what you need to know.
In a nutshell, mandatory climate reporting means businesses are required to disclose information about their environmental impact and how they’re managing climate risks. This isn’t just a voluntary exercise; it’s now a legal obligation for many companies in Australia.
Frameworks like the Australian Sustainability Reporting Standards (ASRS) and AASB S2 are setting the rules. These align with global standards like TCFD (Task Force on Climate-related Financial Disclosures), ensuring Aussie businesses stay competitive while being transparent about their carbon footprint.
There’s a lot of pressure—globally and locally—for businesses to take climate action. For Australia, this shift aims to:
Make companies accountable for their impact on the environment.
Support global climate goals, like net-zero emissions.
Attract investors who are increasingly prioritising sustainability.
Whether it’s extreme weather events or changing regulations, businesses face real risks tied to climate change. Mandatory reporting ensures they’re not only aware of these risks but also actively managing them.
Not every business in Australia is affected right now, but the list is growing. Companies that typically need to comply include:
Publicly listed companies on the ASX.
Big corporations that meet certain revenue or size thresholds.
High-impact industries like mining, energy, agriculture, and transport.
Keep an eye out, though—smaller businesses may also be brought into the fold as regulations evolve.
Here’s what businesses are generally expected to report on:
This covers emissions from:
Scope 1: Direct emissions from company-owned operations (like fuel use).
Scope 2: Indirect emissions from things like electricity use.
Scope 3: Emissions from your supply chain and other indirect sources—it’s tricky but vital for full transparency.
You’ll need to outline risks tied to climate change, such as:
Physical risks: Damage to assets or supply chains due to extreme weather.
Transition risks: Costs or challenges tied to shifting to a low-carbon economy, like regulatory changes or carbon pricing.
This is where you show what you’re doing to reduce emissions, manage risks, and meet climate goals.
It’s not all bad news—reporting also highlights how your business might benefit from innovation in green tech or new sustainable markets.
While it might sound like extra work, mandatory climate reporting has some real upsides for businesses:
Transparent reporting helps win over investors, customers, and employees who care about sustainability.
By identifying climate risks early, you can put measures in place to avoid costly disruptions down the track.
Finding ways to cut emissions often leads to lower energy use and cost savings.
Consumers and investors are leaning towards companies that take climate action seriously. Being ahead of the curve can set you apart.
Of course, it’s not all smooth sailing. Here are a few hurdles businesses might need to overcome:
Tracking emissions—especially Scope 3—can be a logistical headache, especially if you’re just starting out.
Frameworks like ASRS and AASB S2 are new, and understanding all the rules can feel overwhelming at first.
Small to mid-sized businesses may find it tough to allocate the time and money needed to comply.
Getting it wrong—whether through inaccurate data or incomplete reports—could damage your brand.
If mandatory climate reporting is on your radar, here’s how to prepare:
Start with a climate impact assessment to see where your business stands. This will help you figure out what needs improving.
Invest in software to help track and report your emissions. The right tools make managing data a lot easier.
Train your team on the reporting process or hire sustainability consultants to guide you.
Since Scope 3 emissions include your supply chain, working with suppliers is crucial to get the full picture.
Outline measurable, realistic targets for reducing emissions and tackling climate risks.
Let’s face it, crunching emissions data manually is a nightmare. That’s why businesses are turning to tools like carbon tracking software and analytics platforms. These can:
Automate data collection and calculations.
Ensure your reports align with frameworks like ASRS or TCFD.
Identify areas where you can cut emissions or save money.
Mandatory climate reporting is just the beginning. As the world moves toward stricter sustainability goals, these requirements are likely to expand. Businesses that embrace the changes early will not only avoid penalties but also position themselves as leaders in the shift toward a greener economy.
If you’re running a business, now’s the time to act. Mandatory reporting isn’t just about compliance—it’s about future-proofing your company while making a positive impact on the planet. Start preparing today, and you’ll be ahead of the game tomorrow.
