Australia proposes mandatory ISSB-aligned climate disclosures phased from 2024

Australia's Treasury released a consultation paper proposing mandatory climate-related financial disclosures for companies and financial institutions, phased in from 2024-2025 for large entities and aligned with ISSB standards. The move adds Australia to the cohort of major economies mandating ISSB-based reporting, raising the disclosure bar Indian exporters and multinationals must anticipate.

The Australian government unveiled mandatory climate-related financial disclosure requirements through a Treasury consultation paper, building on a December 2022 Discovery consultation. Rules align with the International Sustainability Standards Board (ISSB) of the IFRS Foundation, covering governance, strategy, risk management, targets and metrics. Companies would disclose transition plans, offsets, scenario analysis, and Scope 1 and 2 emissions plus material Scope 3 emissions on industry-specific metrics. A phased approach starts with larger businesses in 2024-2025, medium-sized firms the following year, and smaller entities in 2027-2028.

Large Australian companies and financial institutions are first affected from 2024-2025, with medium and smaller entities following. The requirements mandate disclosure of transition plans including target-setting and mitigation strategies, processes for monitoring and managing climate risks, scenario analysis, and Scope 1, 2 and material Scope 3 emissions. A three-year transitional period covers scenario analysis, transition planning and Scope 3 emissions, with additional time for Scope 3 reporting and a gradual shift from qualitative to quantitative scenario analysis.

Indian companies with Australian subsidiaries, listings or major Australian customers should map exposure to these requirements and assess Scope 3 data-collection capacity, since suppliers may face indirect reporting demands. As another major economy converges on the ISSB baseline, Indian firms preparing BRSR and ISSB-aligned disclosures should monitor the consultation's feedback window and final coverage, content and enforcement rules. Entities should track the phased timeline and the three-year transitional relief periods to align internal reporting roadmaps.

Key figure — Phase-in start: large entities from 2024-2025 financial year