Asset owners and businesses are a step closer to being legally required to report on climate-related financial risks, after Australia’s Senate passed landmark amendments to the nation’s Corporations Act. The bill, which passed the upper house on Thursday and applies to asset owners with more than A$5 billion (US$3.37 billion) in assets under management, will now face a vote in the lower house. The law will bring Australia in line with other jurisdictions with mandatory climate reporting including the UK, the EU, New Zealand and Japan. Under the regime, which adapts the International Sustainability Standards Board (ISSB) IFRS S2 climate-related disclosures standard, organisations must publish an annual sustainability report that includes a climate resilience assessment as well as disclosure of Scope 1, 2 and 3 emissions. Roll-out will be staggered, starting in July 2025 with larger businesses meeting two of three criteria: revenue of A$500, more than A$1 billion in assets, and 500 or more employees. Asset owners above the A$5 billion threshold – which includes the nation’s many large pension funds – will come under the regime in July 2026. The Investor Group on Climate Change (IGCC) welcomed the news, saying the new rules would help Australian companies “remain attractive in global capital markets”. “Before you buy a house you want to make sure it can weather the increasing storms to come,” IGCC CEO Rebecca Mikula Wright said. “Investors apply the same principle to climate investment in the economy because they want to invest in companies prepared for the transition to net zero emissions and deliver stronger returns for millions of superannuation holders.”
