Australia

New Sustainability Reporting Laws Reshape Corporate Accountability

Australia has taken a landmark step in corporate sustainability with the enactment of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024, receiving Royal Assent and ushering in a new era of mandatory climate-related financial disclosures. This significant legislative move signals Australia’s commitment to aligning with global climate goals and sustainability standards, reinforcing transparency and accountability across the financial and corporate sectors.

At EcoActive, we help businesses navigate these evolving regulations with smart ESG strategies, robust reporting systems, and expert-led compliance support.

What the New Law Means for Business

The legislation mandates that eligible companies disclose climate-related financial risks, how they are managed, and their broader sustainability strategies. This shift ensures that climate risks are no longer treated as peripheral concerns but are central to corporate governance and investor transparency.

Key Impacts for Organizations:

• Mandatory integration of climate risk disclosures into annual financial reports
• Phased rollout based on company size and emissions exposure
• Alignment with global frameworks, including IFRS and the Australian Sustainability Reporting Standards (ASRS)
• New sustainability assurance obligations beginning 2025

Timeline & Applicability: Who Needs to Report and When?

To ensure a structured rollout, the new reporting requirements will be phased in over time:

Businesses must include climate-related financial disclosures in their annual reports and ensure these are backed by independent sustainability assurance.

The New Reporting Standards: ASRS

To support this shift, the Australian Accounting Standards Board (AASB) has released two new standards under the ASRS framework:

AASB S1: General Sustainability-Related Disclosures (Voluntary)

• Offers a foundational structure for sustainability disclosures
• Helps companies prepare for more comprehensive reporting obligations

AASB S2: Climate-Related Disclosures (Mandatory)

• Requires disclosure of governance, strategy, risks, metrics, and transition plans
• Includes reporting of greenhouse gas emissions (Scope 1, 2, and eventually 3)
• Aligns closely with international IFRS Sustainability Disclosure Standards

Enhanced Assurance & Accountability

New Assurance Requirements:

• ASSA 5000 – General Requirements for Sustainability Assurance Engagements
• ASSA 5010 – Timeline for Assurance of Sustainability Reports

Starting in 2025, sustainability reports must undergo limited assurance, transitioning to reasonable assurance by 2030, aligning the rigor of ESG data with traditional financial auditing standards.

Modified Liability Framework: Supporting the Transition

To ease the transition, the government has introduced temporary legal protections for certain disclosures:

• Scope 3 emissions: Limited liability for the first 3 years
• Transition plans and scenario analyses: Covered under modified liability
• Auditor commentary on sustainability reports: Also temporarily protected

These adjustments give companies time to build internal systems and confidence in their reporting processes.

How Businesses Can Prepare

Adapting to the new framework will require a coordinated, cross-functional approach. EcoActive supports clients with tools and expertise to streamline this transition and future-proof their sustainability strategies.

Strategic Steps for Readiness:

• Conduct a Gap Analysis: Assess current ESG reporting against ASRS and IFRS standards
• Enhance Data Collection Systems: Build robust infrastructure for capturing Scope 1, 2, and 3 emissions
• Engage with ESG Assurance Experts: Prepare for audit-readiness under ASSA 5000/5010
• Develop Climate Transition Plans: Communicate clear pathways to a low-carbon future
• Strengthen Governance: Assign oversight roles and build internal ESG accountability

The Business Case for Early Adoption

While regulatory compliance is essential, embracing climate-related reporting early delivers long-term strategic benefits:

• Investor Trust: Meet growing demand for transparent, ESG-aligned disclosures
• Market Advantage: Position your brand as a sustainability leader
• Operational Resilience: Identify and mitigate climate-related risks
• Global Alignment: Enhance credibility and access to international capital markets

Partnering with EcoActive

At EcoActive, we offer end-to-end ESG reporting solutions tailored to meet Australia’s evolving regulatory landscape. From compliance readiness to full ESG reporting integration, we empower organizations to lead with transparency, build stakeholder trust, and create measurable environmental impact.

Our Services Include:

• Climate risk analysis and reporting
• ESG data platform integration
• Assurance preparation and auditor collaboration
• ASRS and IFRS-aligned reporting support
• Custom training and stakeholder engagement

Ready to Take the Lead in ESG Compliance?

EcoActive is here to support your business every step of the way—from initial assessments to complete climate-related disclosure implementation. As Australia pioneers bold new climate reporting regulations, your organization has the opportunity to lead the way.

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