Who is required to begin climate-related reporting

Mandatory climate-related disclosures will apply to entities lodging financial reports with ASIC under Chapter 2M of the *Corporations Act 2001*. These requirements commence on 1 January 2025 and apply in three stages based on entity size and emissions status.

Entities are categorised into three groups:

• Group 1: Must meet any two of the following — \$500 million+ in consolidated revenue, \$1 billion+ in gross assets, or 500+ employees.
• Group 2: Criteria include \$200 million+ in revenue, \$500 million+ in assets, or 250+ employees.
• Group 3: Criteria include \$50 million+ in revenue, \$25 million+ in assets, or 100+ employees.

Additionally, National Greenhouse and Energy Reporting (NGER) reporters and asset owners managing \$5 billion+ in assets may fall under these groups depending on thresholds.

When will mandatory climate-related reporting commence

Following Royal Assent of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 on 17 September 2024, reporting obligations begin as follows:

• Group 1: From 1 January 2025
• Group 2: From 1 July 2026
• Group 3: From 1 July 2027

The Australian Accounting Standards Board (AASB) has issued AASB S1 (general sustainability disclosure, voluntary) and AASB S2 (climate disclosure, mandatory from 2025) to support implementation.

Annual reports will consist of four documents: financial report, sustainability report, directors’ report, and auditor’s report. The sustainability report will include climate statements, explanatory notes, and a directors’ declaration.

Group 1: Best practice roadmap

Entities are encouraged to follow a roadmap incorporating both compliance and strategic activities. By 30 June 2025, organisations should:

• Set a carbon inventory boundary
• Develop a Basis of Preparation for carbon accounting
• Internally measure Scope 1 and 2 GHG emissions
• Set related emissions targets
• Include partial TCFD disclosures focusing on governance and strategy

By 30 June 2026, reporting expands to full TCFD coverage, and IFRS S2/AASB S2 gap analysis, material risk assessment, and scenario analysis should be completed. External reporting of Scope 1 and 2 GHG emissions becomes mandatory by 2027, alongside IFRS S2/AASB S2 reporting.

Scope 3 emissions follow a similar timeline but focus on improving measurement accuracy and target setting. A five-step sustainability strategy framework is recommended: assess, prioritise, commit, measure, and report.

Group 2: Best practice roadmap

Group 2 entities begin internal preparation from 2024. Actions by 30 June 2025 should include defining carbon boundaries and carbon accounting methods, as well as internal Scope 1 and 2 GHG reporting. TCFD governance and strategy disclosures are recommended.

By 2026, organisations should enhance GHG measurements and prepare for IFRS S2/AASB S2 compliance through risk assessments and scenario analysis. Mandatory reporting begins from 30 June 2027 for Scopes 1 and 2, and 2028 for Scope 3.

Entities are advised to align with the five-step sustainability strategy and begin stakeholder engagement and voluntary reporting early.

Group 3: Best practice roadmap

Group 3 entities follow a longer preparation cycle, beginning internal readiness in 2025. Key steps include carbon boundary setting, GHG measurement, and partial TCFD disclosure.

By 2027, full TCFD alignment and IFRS S2/AASB S2 internal drafts should be in place. Mandatory reporting begins in 2028 (Scopes 1 and 2) and 2029 (Scope 3).

Early assessment of risks and strategic alignment is advised to ensure compliance and integration into organisational planning.

Basis of preparation and warranties

The guide is general in nature and not a substitute for legal or professional advice. It outlines responsibilities and timing but recommends tailored professional consultation for implementation. BDO and CA ANZ disclaim liability for reliance without such advice.