“A Strategic Shift in Reporting. Is Your Organisation Ready?”
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What you need to know
As of 1 January 2025, climate-related financial disclosures are mandatory in Australia under a phased three-year rollout. This reshapes how organisations assess, manage, and report climate risks and opportunities.
We expect this to require a strategic disclosure shift, potentially impacting governance, investor confidence, and long-term value.
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Who Needs to Report – And When?
A sustainability report is mandatory if you are required to prepare an annual financial report and meet one of the sustainability reporting thresholds.
What are the sustainability reporting thresholds?
- Corporate Size thresholds (two or more)
- Number of employees ≥ 100
- Consolidated total assets ≥ $25m
- Consolidated revenue ≥ $50m
- Emissions thresholds – the entity has emission reporting obligations
- Value of Assets threshold – assets under management ≥ $5b
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Group Entity Type and First Reporting Period
*Small entities (Group 3) would only need to provide climate-related financial disclosures if they identify material climate-related risks or opportunities for that reporting period.
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Indirect Reporting Impact before Mandatory Compliance
The new mandatory climate reporting regime, though phased, will extend its reach beyond the initial cohort of large entities. Even if your business isn’t directly required to report from January 1, 2025, you’ll likely feel the impact indirectly through supply chain pressure.
Larger clients and partners will increasingly seek climate-related data from their suppliers, potentially influencing purchasing decisions. This means that preparing for climate-related disclosures, even if not immediately mandatory, could become crucial for maintaining existing relationships and securing new business.
Beyond compliance, understanding climate-related risks and opportunities is good risk management practice and is expected by APRA.
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What needs to be disclosed?
Climate-related financial disclosures will be included in the new Sustainability Report alongside the Financial Report, Directors’ Report and the Auditor’s Report. The disclosures will contain information on climate-related Governance, Strategy, Risk Management, and Metrics & Targets.
Four Mandatory Pillars:
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Additional Key Requirements
- Directors’ Declaration: Formal declaration of compliance about the Climate Statements and Notes to the Climate Statements in the Sustainability Report
- Scope 3 Emissions: Required from year 2, including financed emissions
- Materiality Assessment: Identifies climate-related risks and opportunities. Process needed even without material risks
- Assurance: Limited assurance applies prior to 1 July 2030, before transitioning to reasonable assurance thereafter
- Climate-related Scenario Analysis: Includes forward-looking risks and quantified impacts
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What are the major Challenges for Boards and Executives
- Preparedness for complex disclosures
- Governance gaps or lack of integrated ESG strategy
- Director liability for misleading or insufficient disclosures
- Fragmented data and risk management processes
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How PFS can help
PFS Consulting partners with reporting entities to deliver climate reporting that is compliant, strategically aligned, and audit-ready.
We bring:
- Deep expertise across actuarial, finance, risk, and sustainability
- Proven track record supporting clients through regulatory reform and ESG strategy
- Tailored, right-sized approach for financial institutions, health organisations and education providers.
We help boards and executives confidently answer:
“Are we ready to stand behind our disclosures?”
Let’s ensure your answer is YES
