Demystifying Australia’s New Mandatory Climate-Related Reporting Standards

Last September, the Australian Parliament finalised and approved legislation introducing the Australian Sustainability Reporting Standards (ASRS). These regulations, aligned with the International Sustainability Disclosure Standards set by IFRS®, include both voluntary and mandatory reporting, with disclosure requirements tailored to a business’s size, industry, and impact.

The Basics

The implementation of these standards will occur in phases. Group 1 entities entered their first mandatory reporting period on January 1st, 2025. Groups 2 and 3 will follow in subsequent years, giving organisations additional time to prepare.

Group 1: Must meet 2 of the following 3 criteria:
• 500+ employees
• $1 billion+ in assets
• $500 million+ in revenue
• Or is above the National Greenhouse and Energy Reporting (NGER) publication threshold

Group 2: Must meet 2 of the following 3 criteria:
• 250+ employees
• $500 million+ in assets
• $200 million+ in revenue
• Or an NGER reporter (not above publication threshold) or asset owner with $5 billion under management

Group 3: Must meet 2 of the following 3 criteria:
• 100+ employees
• $25 million+ in assets
• $50 million+ in revenue

(Source: Albert 2024)

Navigating the Reporting Landscape

While not all businesses are required to report, many will be expected to supply data to clients or partners who do fall under mandatory reporting obligations.

We recommend checking out these helpful resources:

• Australian Treasury: Mandatory climate-related financial disclosures

• 100% Renewables: Understanding mandatory ASRS climate reporting groups

Preparing early can make a big difference. Because sustainability data is complex and interconnected, even exempt businesses should begin monitoring and tracking key emissions and waste streams now.

Phased Implementation

ASRS will roll out in stages, beginning with reduced liability periods so businesses can get used to the requirements without immediate penalties.

Phase 1:
Businesses must report on Scope 1 and Scope 2 emissions.
• Scope 1: Direct emissions from owned or controlled sources (e.g., company vehicles or equipment).
• Scope 2: Indirect emissions from purchased energy (e.g., electricity consumption).

Later Phases:
Businesses will need to report on Scope 3 emissions — indirect emissions from sources like transportation, upstream/downstream supply chains, and operational waste. This typically accounts for the largest portion of a company’s carbon footprint, requiring coordination across the value chain.

The Early Mover Advantage

With growing regulations and market expectations, the smartest businesses are preparing now. Take Extended Producer Responsibility (EPR) as an example — a policy model gaining traction that makes producers responsible for a product's entire life cycle.

Benefits of early compliance:

• Streamlined Operations: Build internal systems now to ensure smoother audits and regulatory reviews later.

• Cost Efficiencies: Identifying waste and energy inefficiencies often leads to long-term savings.

• Stronger Brand Positioning: Investors and customers are drawn to companies with real, measurable sustainability impact.

Sustainability regulations don’t just represent compliance — they offer an opportunity to innovate, build trust, and lead.

Image Credit: Julia Schenk © WOTAMA

After is helping businesses across Australia prepare for a low-waste, circular future — one textile at a time.
If your organisation wants to begin tracking and reducing its textile impact, get in touch or learn more about our services at after.net.au.

Sources

Boshoff, Aletta. “Mandatory sustainability reporting in Australia: Your questions answered” https://www.bdo.com.au/en-au/insights/esg-sustainability/mandatory-sustainability-reporting-in-australia-starts-on-1-january-2025, Aug 2024.

Mara, Caroline. “Sustainability reporting standards and legislation finalised: mandatory sustainability reporting begins” https://www.pwc.com.au/assurance/esg-reporting/australian-sustainability-reporting-standards.html#:~:text=On%209%20September%202024%2C%20the,or%20after%201%20January%202025.

Rade, Alyssa. “Deep dive: Scope 3 emissions” https://www.sustain.life/blog/scope-3-emissions, Dec 2023. (Scope 3 background)

Treasury.gov.au “Mandatory climate-related financial disclosures” https://treasury.gov.au/sites/default/files/2024-01/c2024-466491-policy-state.pdf.