Climate Reporting: Not just for large Corporations

In the quest for a sustainable future, small businesses play a pivotal role in Australia’s economic landscape. As we move towards a more environmentally conscious era, understanding climate reporting becomes imperative for businesses of all sizes.

The Australian government is on the brink of introducing mandatory climate-related disclosure laws targeted at large businesses and financial institutions. These regulations mandate the annual disclosure of climate-related financial risks, opportunities, plans, and strategies. While the reporting requirements initially focus on larger entities, smaller businesses should remain attentive, as they may be affected indirectly.

The criteria for businesses subject to these laws involve consolidated revenue, gross assets, and employee count. Although the majority of small and medium-sized businesses might not meet these thresholds, they often form part of larger businesses’ supply chains, necessitating eventual engagement with climate reporting considerations.

Under the proposed regulations, reporting entities will also be required to disclose scope 3 emissions, which include emissions occurring throughout the supply chain. While direct reporting obligations may not apply immediately to small businesses, understanding scope 3 emissions and their potential impact on larger partners is crucial for long-term sustainability planning.

As Australia transitions towards a sustainable future, small businesses must proactively navigate climate reporting requirements and uphold transparency standards to build trust and credibility in the marketplace. By staying informed and compliant, small businesses can contribute meaningfully to Australia’s environmental goals while safeguarding their reputation and growth prospect.

If you would like to understand more about climate reporting and how your business can start its journey, please feel free to reach out our ESG expert, Ann-Marie Ingeri.

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