Australia is considering changes to its mandatory climate-related financial disclosure regime aimed at reducing compliance costs while maintaining the quality, credibility, and international comparability of climate reporting.
The Australian Treasury opened a consultation on August 24, 2026, focused on three areas: climate disclosure assurance, clearer guidance on key reporting concepts, and reducing the burden of information requests across supply chains.
The consultation comes as organizations continue implementing Australia’s mandatory climate-related reporting requirements.
Key Highlights
The proposals under consultation include:
• Changes to climate disclosure assurance requirements
• Options to retain limited assurance for longer or delay the transition to reasonable assurance
• Clearer guidance around value-chain information requests for Scope 3 reporting
• Greater availability of emissions factors to reduce unnecessary primary supplier-data requests
• Additional guidance on concepts such as information available “without undue cost or effort”
• Measures intended to reduce reporting costs while maintaining credible and internationally comparable disclosures
These are proposals, not final regulatory changes. Treasury has also stated that any changes will be sequenced to avoid unnecessary disruption for organizations that have already prepared for sustainability reporting.
Why Is Australia Reviewing Its Climate Reporting Requirements?
Australia is currently implementing mandatory climate-related financial reporting under the Corporations Act 2001, supported by AASB S2 Climate-related Disclosures.
As organizations begin applying these requirements, the government is examining whether elements of the reporting process create unnecessary costs or administrative complexity.
According to the Australian Treasury consultation, the objective is to lower costs for businesses while keeping climate reports high-quality, credible, and comparable with those produced in other countries.
The review therefore focuses on making implementation more efficient rather than removing the underlying climate disclosure requirements.
Could Australia’s Climate Assurance Requirements Change?
Yes. Assurance is one of the main areas under review.
Australia currently has a phased sustainability assurance framework under ASSA 5010 — Timeline for Audits and Reviews of Information in Sustainability Reports.
Under the current framework, sustainability reports for financial years commencing on or after July 1, 2030 are required to be audited, corresponding to reasonable assurance.
The government is seeking feedback on alternatives that could reduce assurance costs. Options under consultation include:
• Maintaining limited assurance rather than moving fully to reasonable assurance
• Delaying the transition to reasonable assurance
• Applying reasonable assurance to more mature reporting areas while retaining limited assurance for less mature information
For reporting teams, the proposals reinforce the importance of maintaining clear evidence, methodologies, reviews, and data traceability regardless of the final level of assurance required.
EcoActive’s ESG Disclosure Management connects reported information with source data, supporting evidence, calculations, reviews, and approvals to support assurance-ready reporting.
What Could Change for Scope 3 and Value-Chain Reporting?
Value-chain information is another major focus of the consultation.
AASB S2 includes requirements relating to greenhouse gas emissions, including Scope 3 emissions across upstream and downstream activities.
Collecting this information can result in reporting organizations requesting significant amounts of data from suppliers and other businesses in their value chains, including smaller companies.
Treasury is therefore considering ways to make value-chain information requests more proportionate and predictable.
The proposals include:
• Additional guidance on what constitutes a reasonable request for information from businesses within the value chain
• Clearer boundaries around the information reporting organizations may reasonably seek
• Greater availability of publicly accessible Australian emissions factors
• Greater ability to use reliable secondary information where appropriate
The aim is not to eliminate Scope 3 reporting. It is to reduce unnecessary complexity in obtaining the information required to support it.
Effective Value Chain Management can help organizations organize upstream and downstream sustainability information while maintaining visibility into data sources, methodologies, estimates, and supporting evidence.
What Does “Without Undue Cost or Effort” Mean?
Australia’s climate reporting requirements include proportionality mechanisms designed to recognize that not every organization has access to the same level of climate information.
One of these concepts is the use of reasonable and supportable information that is available without undue cost or effort.
Treasury is considering additional guidance to help organizations interpret concepts including:
• Reasonable and supportable information
• Information available without undue cost or effort
• Proportionality mechanisms
• Statements that an organization has no material climate-related risks or opportunities
Additional educational resources and workshops may also be considered to help organizations apply these mechanisms more consistently.
Do the Proposals Change AASB S2?
Not yet.
The consultation does not remove Australia’s mandatory climate-related financial disclosure regime or replace AASB S2 Climate-related Disclosures.
AASB S2 remains the principal Australian climate disclosure standard and requires organizations within scope to report relevant information about climate-related risks and opportunities.
Its requirements address areas including:
• Governance
• Strategy
• Climate-related risks and opportunities
• Climate resilience
• Greenhouse gas emissions
• Metrics and targets
Organizations should therefore continue preparing under the requirements currently applicable to them while monitoring the outcome of the consultation.
Learn more about Australian climate reporting requirements.
What the Proposed Changes Mean for Reporting Teams
If adopted, the measures could reduce some of the administrative and assurance burden associated with Australian climate reporting.
But simplifying the reporting process does not remove the need for reliable climate information.
Reporting teams may still need to manage:
• Scope 1, Scope 2, and Scope 3 emissions
• Climate-related risks and opportunities
• Value-chain information
• Climate scenarios and resilience assessments
• Metrics and targets
• Estimates and emissions factors
• Source data and supporting evidence
• Internal reviews and approvals
• Assurance-ready disclosures
This makes the reporting process itself increasingly important.
Organizations need to understand where reported information came from, how it was calculated or estimated, who reviewed it, and how it connects with the final disclosure.
Why Connected Value-Chain Data Still Matters
The consultation highlights one of the practical challenges of climate reporting: companies need information about activities beyond their own operational boundaries, but requesting primary data from every supplier is not always practical or proportionate.
Reporting processes therefore need to accommodate different forms of information, including:
• Supplier-provided data
• Activity data
• Emissions factors
• Estimates and proxies
• Secondary data
• Calculation methodologies
• Supporting documentation
EcoActive’s Value Chain Management capability connects sustainability-related value-chain information with Scope 3 emissions, reporting requirements, evidence, and final disclosures.
Relevant value-chain information can also connect with EcoActive’s GHG Calculator for the management of Scope 1, Scope 2, and Scope 3 emissions.
This helps maintain a clearer reporting path from:
Value Chain → Activity Data → Emissions Calculation → Evidence → Review → Disclosure
How EcoActive Supports Australian Climate Reporting
EcoActive is an AI-native disclosure management platform that connects sustainability data, climate information, evidence, reviews, and final disclosures within one reporting environment.
Organizations preparing for Australian climate reporting can use EcoActive to:
Manage climate and sustainability data
Collect and calculate Scope 1, Scope 2, and Scope 3 emissions
Organize upstream and downstream value-chain information
Assess climate risks through Climate Scenario Analysis
Connect metrics, targets, narratives, and supporting evidence
Coordinate review and approval workflows
Maintain traceability from source information to final disclosure
Support assurance-ready reporting as requirements evolve
EcoActive helps reporting teams maintain the connection between data, assumptions, calculations, evidence, reviews, and disclosures rather than managing each stage through separate spreadsheets and reporting processes.
Explore ESG Reporting with EcoActive and Australian climate reporting.
How Organizations Can Prepare
Organizations affected by Australia’s climate reporting requirements should continue preparing under the requirements currently in force while monitoring the outcome of the Treasury consultation.
Reporting teams should assess whether their current processes can:
• Identify the reporting requirements applicable to the organization
• Collect and calculate Scope 1, Scope 2, and Scope 3 emissions
• Manage value-chain information without unnecessary duplication
• Document assumptions, estimates, and emissions factors
• Maintain supporting evidence for reported information
• Assess climate resilience using appropriate climate scenario analysis
• Coordinate internal review and external assurance
• Adapt as reporting and assurance requirements evolve
Building these capabilities into a connected ESG reporting process can help organizations respond more efficiently as Australia’s climate disclosure regime develops.
Frequently Asked Questions
What is Australia proposing for climate reporting in 2026?
The Australian Government is consulting on measures intended to improve the efficiency of climate-related financial disclosures. According to the Australian Treasury, the proposals focus on changing assurance rules, providing clearer guidance on key reporting concepts, and reducing the burden of information requests across supply chains.
Is Australia removing mandatory climate reporting?
No. The consultation does not remove Australia’s mandatory climate-related financial reporting regime. It is focused on reducing compliance costs and improving implementation while maintaining high-quality, credible, and internationally comparable disclosures.
Could Australia’s climate assurance requirements change?
Yes. The government is considering alternatives to the current assurance pathway. The existing requirements are set out in ASSA 5010, while the consultation considers options that could alter or delay the transition to reasonable assurance.
Will companies still need to report Scope 3 emissions?
AASB S2 includes Scope 3 greenhouse gas emissions within its climate-related disclosure requirements. The consultation is looking at how the underlying value-chain information can be obtained more proportionately, rather than proposing to remove Scope 3 reporting.
How could the proposals affect suppliers?
Treasury is considering clearer boundaries around reasonable information requests across supply chains and greater availability of emissions factors. These measures could reduce the need for complex primary-data requests, particularly from smaller businesses.
When does the Australian climate reporting consultation close?
The Australian Treasury consultation opened on August 24, 2026 and closes on October 2, 2026.
As Australia’s climate disclosure regime continues to evolve, organizations that build connected, assurance-ready reporting processes will be best positioned to adapt to changing assurance and value-chain requirements.
Prepare Connected, Assurance-Ready Climate Disclosures with EcoActive
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