Article 2 of 3: Mandatory Sustainability and Emissions Timelines in Australia
With mandatory climate and sustainability reporting now law in Australia, businesses must navigate their compliance obligations and timelines. This article provides a clear overview of what's required, by when, and how to stay ahead of enforcement milestones.
Mandatory Sustainability and Emissions Timelines in Australia
Australia's climate-related financial disclosure regime introduces phased mandatory reporting for large, listed, and significant entities. This requirement aligns with emerging global norms, particularly the ISSB (International Sustainability Standards Board) standards which consolidate the TCFD framework.
The reporting obligations include:
Climate governance (board and management oversight of climate-related risks and opportunities)
Climate strategy (risks and opportunities identified over the short, medium, and long term, including plans to transition to net zero)
Risk management (processes for identifying, assessing, and managing climate-related risks)
Metrics and targets (Scope 1, 2, and 3 greenhouse gas emissions, climate-related targets, and scenario analysis)
Phased introduction timeline:
2025: Group 1 reporting entities commence reporting. These include large, listed entities, financial institutions, and registered superannuation entities with assets over $5 billion.
2026: Group 2 reporting entities begin reporting. These include mid-sized listed and unlisted companies meeting certain asset and employee thresholds.
2027: Group 3 reporting entities begin reporting. These include smaller entities above $50 million consolidated revenue and meeting specific thresholds.
2028: Transitional relief ceases; all reporting entities are subject to full legal obligations, including potential liability for misstatements.
Complementary regulatory frameworks and enforcement mechanisms include:
National Greenhouse and Energy Reporting (NGER) Act (2007): Requires facilities and corporations exceeding thresholds to report Scope 1 and 2 emissions and energy production/use.
Safeguard Mechanism: Applies to facilities with Scope 1 emissions above 100,000 tonnes CO2-e annually; requires maintenance of emissions within set baselines or offsetting through purchasing credits.
Australian Packaging Covenant Organisation (APCO): Currently voluntary packaging sustainability reporting linked to the 2025 National Packaging Targets; government consultation points to potential mandating of packaging data reporting post-2025.
Commonwealth Procurement Rules (CPRs): Require Australian Government procurement decisions to consider sustainability; broader state procurement rules include similar provisions.
ASX Corporate Governance Principles (4th Edition): Principle 7 encourages listed entities to disclose environmental and social risks where material.
Additional notes:
The ISSB standards adopted by Australia build on the TCFD recommendations, creating alignment with major jurisdictions such as the UK, EU, and Canada.
The EU Corporate Sustainability Reporting Directive (CSRD) will apply to Australian entities with significant operations or subsidiaries in the EU, imposing additional reporting obligations.
The EU and other jurisdictions are progressing towards digital product passports and product-level environmental data requirements. Australian exporters will need to comply as a condition of market access.
Industry initiatives, including those by APCO and GS1, are working towards granular product and packaging data standards to meet traceability and disclosure expectations.
Failure to comply with these requirements could expose entities to regulatory penalties, reputational damage, investor action, and loss of market access where sustainability credentials are a procurement requirement.
Compliance is critical—but the right approach to sustainability reporting also creates real commercial advantage. In Part 3, we explore how sustainability reporting can help Australian businesses strengthen resilience, reputation, and performance.
This article was last updated in June 2025
