An Update On Sustainability Reporting

Changes to the Corporations Act

Companies that report under Chapter 2M of the Corporations Act and meet certain size thresholds will be required to include a sustainability report for climate-related risks and opportunities in their annual report. The implementation is staggered into three groups with Group 1 entities being required to report from December 2025.As well as the above criteria, there are other requirements for certain entities:

• National Greenhouse and Energy Reporting Act (NGER) entities will be in Group 1 if they are above the NGER reportable threshold, otherwise they are in Group 2
• Asset owners who are registered schemes, registrable superannuation entities or retail CCIVs are in Group 2 if their assets under management are greater than $5bn

In response to the changes to the Corporations Act, the AASB has released two sustainability reporting standards:

AASB S1: General Requirements for Disclosure of Sustainability-related Financial Information

• AASB S1 sets out the general requirements for entities to disclose sustainability-related financial information, focusing on material sustainability-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance, or cost of capital over the short, medium, or long term
• This standard is a voluntary standard for entities that opt to report on sustainability information, other than climate

AASB S2: Climate-related Disclosures

• AASB S2 is the mandatory stand-alone standard for entities that are required to disclose climate information in their annual reports
• AASB S2 includes requirements relating to governance, strategy, risk management, and metrics and targets and incorporates relevant information from S1 as an appendix

Entities should consider whether they are likely to be included in the mandatory climate reporting regime and start to consider systems and processes to prepare for this. In addition, entities should consider whether they are in the value chain of any entities who have to report and if so, commence conversations to understand whether they will need to provide carbon emissions as part of the larger entities’[MF1] scope 3 reporting requirements.

Want to know more about how Bentleys can help you?

Make a time for a chat with us today. We’re here to help you get where you want to be.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.