The Australian federal government has recently adopted mandatory climate-related disclosure standards, after the country’s Senate passed the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (the “Climate-related Reporting Bill”). The Climate-related Reporting Bill is expected to come into force on January 1, 2025.

The Australian reporting requirements will apply to all public companies and large proprietary companies required to provide audited annual financial reports to the Australian Securities and Investments Commission. Reporting requirements will be phased-in based on specified size thresholds (all amounts in Australian dollars): 

• January 2025: Large entities meeting two of the following criteria: (1) over 500 employees, (2) revenues over $500 million, and (3) assets over $1 billion.^[1]
• July 2026: Medium sized companies or asset managers that meet two of the following criteria: (1) over 250 employees, (2) revenues over $200 million, (3) assets over $500 million, and (4) assets over $5 billion under management.^[2]
• July 2027: For smaller companies that meet two of the following criteria: (1) over 100 employees, (2) revenues over $50 million, and (3) assets over $25 million.

The Climate-related Reporting Bill requires disclosures on, among other things, climate-related risks and opportunities and on greenhouse gas (“GHG”) emissions across the value chains, in line with the GHG Protocol – Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The The Climate-related Reporting Bill also includes a phased-in approach for Scope 3 GHG emissions reporting, allowing companies an extra year from the beginning of their disclosure requirements to report on the quantity of their indirect value chain emissions as well as three years of protection from litigation concerning Scope 3 GHG emissions disclosures.

The Climate-related Reporting Bill is largely aligned with the International Sustainability Standards Board’s (“ISSB”) two global baseline disclosure standards, being IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS2 Climate-related Disclosure (together, the “ISSB Standards”) which were issued in June 2023. For more information on the ISSB standards and updates to the standards, see our blogs here and here.

The Australian Accounting Standards Board is in the process of developing the internationally-aligned climate disclosure standards for Australian companies, which are expected to be issued shortly, and the Australian Auditing and Assurance Board is developing assurance standards for climate disclosures in late 2024.

In Canada, the Canadian Sustainability Standards Board (the “CSSB”) released a proposal that was available for public comment until June 10, 2024 and, like the Climate-related Reporting Bill, was largely aligned with the ISSB Standards. The CSSB has not yet published the results of its consultation. Once the CSSB standards are finalized, it is expected that the Canadian Securities Administrators (the “CSA”) will publish for comment a revised version of its own climate-related rule, which was first unveiled in October 2021. A timeline has not yet been announced in regard to climate-related reporting requirements for Canadian reporting issuers. For more information on the Canadian state of affairs regarding climate-related disclosures, please see our blog on updates regarding the CSSB here.

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[1] Large emitters of GHG who are already subject to Australia's National Greenhouse and Energy Reporting scheme will be included in either Class I or Class II, depending on their GHG emissions levels.

[2] Asset owners (such as registrable superannuation entities, retail corporate collective investment vehicles and other registered schemes) will be considered large if funds under management are more than $5 billion.