Treasury released in January an exposure draft legislation Treasury Laws Amendment Bill 2024: Climate-related financial disclosure that seeks to amend parts of the ASIC and Corporations acts. The new act would introduce mandatory climate-related requirements, initially for big business and financial institutions, to disclose climate-related risks and opportunities.
The bill requires entities that lodge financial reports under Chapter 2M of the Corporations Act to meet certain minimum-size thresholds and/or have emissions-reporting obligations under the NGER scheme. Disclosures relating to climate in accordance with AASB sustainability standards will also be mandated.
The amendments would be phased in over four years, phase one commencing on 1 July.
Climate disclosures would be subject to assurance requirements like those in force for financial reports. They would require entities to obtain an assurance report from their financial auditor. The extent and level of assurance would be set out in standards developed by the AUASB.
The AASB will soon release ASRS 1 General Requirements for Disclosure of Climate-related Financial Information and ASRS 2 Climate-related Financial Disclosures. The federal government will also finalise its legislation on climate change.
This GAAPinar will:
- Profile the Treasury Laws Amendment Bill 2024: Climate-related financial disclosure
- Describe the principles in ASRS 1 and ASRS 2
- Outline what preparers need to do
- Discuss the current and proposed ethical considerations of climate change reporting, and
- Discuss the assurance implications of climate-change reporting.
