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A Guide to Upcoming Public vs Private Climate-related Regulations in Australia

Private vs Public – at a glance

The past year has seen a slew of new climate-related frameworks, standards, regulations and consultations release in Australia and beyond. Adding to the already dense mix of acronyms, we have seen several additional ones being added this year. In this guide, we break down public vs private climate-related regulations, the entities overseeing the various frameworks, and the essentials that you need to know for preparing and reporting in the months ahead.

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At a glance public vs private climate-related regulations and standards in Australia.

Public and Private Climate Disclosure Programmes

The Australian Government is committed to improving the quality of climate-related financial disclosures in both the public and private sectors.

The Government’s commitment to introducing internationally-aligned mandatory climate disclosure requirements will enable financial market participants to accurately price in climate-related risks and opportunities, supporting the transition to a low-carbon economy.

The climate-related disclosure policy for the private sector is being led by the Australian Treasury, while the Commonwealth Climate Disclosures for the public sector are being led by the Department of Finance.

Public vs Private Climate-related Regulations – Entities Covered

Private sector reporting entities include large listed and unlisted companies that are required to report under Chapter 2M of the Corporations Act 2001 (Corporations Act).

This includes all ‘controlling corporations’ under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), and all asset owners with over $5 billion in assets under management. A phased reporting timeline is proposed commencing from the FY24-25 reporting period – our previous article takes a closer look at the draft legislative framework for the private sector.

Public sector entities will be covered in two streams, with Stream 2 entities being required to report through a phased approach over four years commencing from the FY23-24 reporting period.

  • Stream 1: Commonwealth companies that meet the proposed private sector thresholds
  • Stream 2: All corporate (CCEs) and non-corporate Commonwealth entities (NCEs), and all other Commonwealth companies

Overview of phased implementation approach for Stream 2 public sector entities.

The reporting content and requirements for climate-related disclosures for all private sector entities as well as Stream 1 Commonwealth companies will be set out in the Australian Sustainability Reporting Standards (ASRS), developed by the Australian Accounting Standards Board (AASB).

The AASB released the Exposure Draft ED SR1 Australian Sustainability Reporting Standards – Disclosure of Climate-related Financial Information in October 2023; this is open for comment until 1 March 2024.

The AASB standards are based on the standards developed by the International Sustainability Standards Board (ISSB) specifically IFRS S2 Climate-related Disclosures. The ISSB standards replace and expand on the previous best practice framework on climate risk disclosures, the Recommendations of the Task Force on Climate-related Disclosures (TCFD), against which many large Australian entities have begun reporting.

Commonwealth Climate Disclosure requirements for Stream 2 public sector entities are being developed by the Department of Finance.

Reporting obligations will be defined according to the three Commonwealth entity types.

Although they will largely align with both the international ISSB standards and the national AASB standards, there will be specific amendments to account for the structure, objectives and functions of Commonwealth entities, their regulatory environments and various other Government policies. It is expected that the Commonwealth Climate Disclosure requirements will be finalised in Q2 2024.

Relevant Legislative Instruments

For the private sector and Stream 1 Commonwealth companies, climate-related financial disclosures will be mandated through amendments to the Corporations Act (further details here), and will be subject to the existing liability framework under both the Corporations Act and the Australian Securities and Investments Commission Act 2001 (ASIC Act). Amendments to the Corporations Act will be put forward to the Australian Parliament.

The Australian Securities and Investments Commission (ASIC), created by the ASIC Act, has regulatory oversight of the Corporations Act. The ASIC Act is also the legislation that creates other statutory bodies including AASB and the Auditing and Assurance Standards Board (AUASB, further information below).

It is proposed that the disclosure requirements for Stream 2 Commonwealth entities and companies will be enacted through amendments to the following legislative instruments:

  • Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), specifically s516A on annual reports to deal with environmental matters
  • Public Governance, Performance and Accountability Act 2013 (PGPA Act)
    • Resource Management Guides, specifically RMG 136 on annual reports for corporate Commonwealth entities

Assurance & Verification

Climate disclosures of private and public Stream 1 reporting entities will be subject to similar assurance requirements to those currently in the Corporations Act for financial reports.

Assurance will be required in line with new sustainability assurance standards, which will be developed by the AUASB based on the final standard from the International Auditing and Assurance Standards Board (IAASB).

Several assurance pathways have been proposed in Treasury’s latest consultation, including a phased pathway to full reasonable assurance of all climate disclosures from 1 July 2030. This pathway will be set out by the AUASB.

The assurance and verification of Stream 2 public entities will be designed by the Department of Finance in consultation with the Australian National Audit Office (ANAO). The Department of Finance will be responsible for monitoring compliance.

Supporting Programmes and Policies

Various programmes and policies exist as part of the broader climate-related ecosystem. Examples of relevant programmes include the following.

Private Sector

The Treasury is leading the development of Australia’s Sustainable Finance Strategy, which aims to underpin the development of Australia’s sustainable finance markets, enable firms to access capital needed for the transition to a low-carbon economy, accurately price climate-related risks and maximise opportunities.

As part of implementing the Sustainable Finance Strategy, the Government has committed to developing an Australian Sustainable Finance Taxonomy over 2023-24. This will develop a foundation for Australia’s wider sustainable finance landscape and support alignment with other international sustainable finance taxonomies and markets.

The initial development will be led by the Australian Sustainable Finance Institute (ASFI), with oversight provided by the Council of Financial Regulators (CFR) Climate Working Group. The CFR Working Group is comprised of Treasury, ASIC, the Australian Prudential Regulation Authority (APRA) and the Reserve Bank of Australia (RBA).

Public Sector

The National Climate Resilience and Adaptation Strategy sets out the Government’s commitments to support climate adaptation and mitigation across all levels of government, businesses and the community. This is being implemented by the National Adaptation Policy Office, which coordinates work on climate adaptation across all governments.

The National Climate Risk Assessment and National Adaptation Plan will be delivered over 2023-2025 and will build on the various State, territory and local government-level climate risk programmes, delivering a shared national framework and a baseline of current, new and emerging climate risks.

The Australian Government is developing the Climate Risk and Opportunity Management Program (CROMP), which aims to support Commonwealth agencies to identify, manage and disclose physical and transition climate risks and opportunities across Government agencies, policies, programmes, operations, assets and services.

The Australian Public Service Net Zero in Government Operations Strategy (APS Net Zero 2030) outlines the approach for the Government’s commitment to achieve net zero in its operations by 2030. This includes non-corporate Commonwealth entities and includes Scope 1 and 2 emissions at this stage.

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Reach out to us for more information on public vs private climate-related regulations and how to prepare

We can help you navigate the public vs private climate-related regulations as support businesses across all stages of their sustainability and climate disclosure reporting including in line with the emerging Australian Sustainability Reporting Standards (ASRS Standards), ISSB standards and other ESG reporting frameworks such as the Global Reporting Initiative.

Our experts can also help you understand and expand your GHG inventory in line with the global GHG Protocol, Climate Active, and financed emissions under PCAF (Partnership for Carbon Accounting Financials).

Contact us via email or Call +61 3 7035 1740

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    ATIYAH

    CARBON NEUTRAL PRODUCT

    ​AWESOME STREETFOOD, ZERO CARBON – that’s Atiyah. With its launch in 2020, Atiyah became Australia’s first 100% renewable-run street food zero-carbon kitchen certified under Climate Active. Atiyah sets operational carbon efficiency benchmarks and raises awareness about the global warming impact of food choices. They even disclosed the footprint of every item on their menu to empower their customers’ low-carbon lifestyle. We assist ATIYAH with their carbon neutrality certification.

    ORIGIN

    CARBON NEUTRAL ORGANISATION & PRODUCT

    Responsible business is at the heart of what Intrepid does. Intrepid has been a pioneer in measuring and reporting carbon emissions since 2010. When it joined the Climate Active family in 2018, it became the largest global provider of carbon neutral certified travel adventures and the first company to voluntarily include all global operations in its certification.

    NEXTDC

    CARBON NEUTRAL ORGANISATION & PRODUCT NEXTDC are one of Australia‘s most trusted providers of data centre solutions. Since 2018 we’ve been assisting them with their Greenhouse Gas (GHG) accounting and in March 2021, the company broke ground with the launch of NEXTneutral, an innovative Climate Active-compliant colocation opt-in program for their customers. Learn more.

    GOODMAN

    COMMERCIAL & INDUSTRIAL PROPERTY
    Goodman Group is an ASX20 global property expert in logistics and business space. It owns, develops and manages industrial property in 17 countries. We provide strategic advisory on Goodman’s operational GHG inventory and trajectory, the GHG intensity of its investment portfolio, net zero pathway and carbon neutral certification, as well as the renewable energy delivery strategy.

    ISPT

    PROPERTY FUND MANAGEMENT
    ISPT is one of Australia’s largest unlisted property fund managers, with over $11.9 billion of funds under management. We assist ISPT with its net zero pathway, land-based offset strategy as well as maintaining its carbon neutral certification. When ISPT joined the Climate Active network, it pioneered many concepts. It became the first participant under Climate Active to voluntarily include base building operations on all its owned and operated properties into its organisational certification and, as an industry first, procured 100% Australian Carbon Credit Offset Units (ACCUs).

    BHP

    METALS & MINING
    BHP is an ASX listed, world-leading resources company and are among the world’s top producers of major commodities, including iron ore, metallurgical coal and copper. They also have substantial interests in oil, gas and energy coal. We assist BHP comply with energy and greenhouse gas legislation and advise facilities on matters related to energy use and production emissions.

    Intrepid

    TRAVEL
    Intrepid Travel is the largest small group adventure travel company in the world. Responsible business is at the heart of what Intrepid does. We assist Intrepid with their Human Rights reporting obligations as well as many aspects of its GHG accounting and reporting. This includes its Science-based target (SBT), making them the first tour operator with approved SBT. When Intrepid joined the Climate Active family in 2018, it became the largest global provider of carbon neutral certified travel adventures and the first company to voluntarily include all global operations in its certification.

    LION

    BEVERAGES
    Lion is a global beverage company with a portfolio of brands in beer, cider, wine, spirits, seltzers, and non-alcoholic drinks. Lion has four large and four small Australian breweries, and its brands include XXXX, GOLD, Tooheys New, and Little Creatures. We assisted Lion to become Australia’s first large-scale brewer to be certified as carbon neutral under Climate Active in 2020.

    QANTAS Airline

    AIRLINE
    Founded in the Queensland outback in 1920, Qantas has grown to be Australia’s largest domestic and international airline. We have worked with Qantas since 2016 on a variety of emissions reduction projects.

    ORICA

    METALS & MINING
    Orica is the world’s largest provider of commercial explosives and innovative blasting systems to the mining, quarrying, oil and gas and construction markets, a leading supplier of sodium cyanide for gold extraction, and a specialist provider of ground support services in mining and tunnelling. We assist Orica with their regulatory reporting such as NGERs and also carbon abatement projects.

    Fulton Hogan

    CONSTRUCTION
    Fulton Hogan has more than 80 years experience in the transport, water, energy, mining, civil construction and land development infrastructure in New Zealand, Australia and the South Pacific.
    We assist Fulton Hogan comply with NGER and NPI legislation for their extensive national operations. We work Fulton’s team to streamline reporting procedures to avoid duplicating data handling and transparently demonstrate data flows and aggregations.

    TOYOTA AUSTRALIA

    AUTOMOTIVE
    Toyota Australia was founded in 1963 and is one of Australia’s leading automotive companies. We have worked with Toyota since 2018 on many aspects of its GHG accounting, target setting, reduction initiatives, and reporting. We continue to inform strategic decisions around the contribution of the Australian business to the realisation of Toyota’s global Environmental Challenge 2050.

    H&H Group / Swisse Wellness

    CONSUMER GOODS
    H&H Group is a global health and nutrition company listed on the Hong Kong Stock Exchange. Consumer brands include Biostime, Solid Gold Pet, Dodie, Good Goût, Aurelia Probiotic Skincare, CBII, and Swisse Wellness, a vitamin, supplement, and skincare brand, born in Australia in 1969. We have been working with Swisse and the group on many aspects of its GHG accounting and reporting, including the ongoing management of its Climate Active certification.

    AGL ENERGY

    ENERGY
    AGL is one of Australia’s leading energy companies offering electricity, gas, solar and renewable energy services, plus internet and mobile plans. We have assisted AGL for over five years on a variety of activities including audit and assurance projects.

    VIVA ENERGY

    ENERGY
    Viva Energy is a leading energy company which supplies about a quarter of Australia’s fuel requirements. Viva Energy make, import, blend and deliver fuels, lubricants, solvents and bitumen through extensive national and international supply chains. We assist Viva Energy with a range of energy and greenhouse gas related projects. These include annual NGER reporting, Safeguard baseline setting, advice on Emission Reduction Fund opportunities and emission trajectories.