With the incoming Australian Sustainability Reporting Standards (ASRS) setting a new benchmark for environmental impact reporting and management, Australian businesses are poised for a significant shift in how to approach sustainability. Aligning with global efforts to drive transparency and comparability of corporate performance, the ASRS, slated for 2025, will embed sustainability into companies’ core financial reporting. Retailers must understand these regulatory changes now to get ready to disclose and reduce regulatory risk to their business.
Key Developments
In January 2024, the Australian Treasury proposed mandatory climate-related financial disclosures for public and private companies to align with international benchmarks, including those set by the International Sustainability Standards Board (ISSB), the new global standard for sustainability and climate reporting. The proposed Australian Sustainability Reporting Standards (ASRS) were introduced to Parliament as part of the Treasury Laws Amendment Bill in March and have now been passed by the Senate and also House of Representatives on September 9, 2024.
The ASRS outline climate-related financial reporting for large businesses, particularly those lodging annual financial reports under Chapter 2M of the Corporations Act. Entities meeting specific size thresholds, those with emissions reporting obligations under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), or asset managers with significant assets must prepare a sustainability report as part of their annual financial report. The report should include climate statements for the year and information on climate-related risks, opportunities, governance, strategy, transition planning, targets, and industry-based metrics, including a full account of all scopes 1, 2 and 3 of GHG emissions, in line with the AASB standards. These will also need to be audited.
The ASRS categorise companies into three tiers, each required to begin reporting in a phased manner, based on revenue, assets and employee count. The first group of the three must start reporting from January 1 2025.
Implications for Retail Companies
For retail, the ASRS present challenges and opportunities. Companies will need to implement robust systems for tracking and managing environmental impacts, such as carbon emissions, as well as develop in-depth materiality and climate scenario analyses. Non-compliance could result in penalties, requiring companies to adapt their processes and become extremely knowledgeable of their operations and supply chain. However, this is not just about managing regulatory risk, but an opportunity to measurably drive positive environmental change, and build long-term resilience. With the January 1, 2025 deadline approaching, businesses must start preparing now.
At The Purpose Agents, we understand that navigating these new reporting requirements may be challenging. That’s why we have created a fact sheet on the Australian Sustainability Reporting Standards that outlines all the key things you need to know.
You can access the fact sheet here.
Get in touch with us at info@thepurposeagents.com or via the contact form to see how we can help your business prepare!
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