With Labor re-elected, the Australian sustainability reporting clock starts now

Australia's 2025 federal election has come and gone, and with it, one major uncertainty has been removed for corporate sustainability and finance teams: mandatory climate-related financial disclosures aren’t going anywhere. The re-election of the Labor government cements the trajectory that has been building for the last 18 months — alignment with global sustainability reporting frameworks, clear emissions disclosure requirements, and a steady march toward climate risk transparency.

If your team was holding off on ramping up sustainability reporting in case of a policy pivot, that window has closed. It’s now full steam ahead.

A clear mandate for climate reporting

With Labor retaining power, the groundwork laid for mandatory climate disclosures is now firmly set to continue. The Treasury’s implementation plan for climate-related financial disclosures, aligned with the ISSB (International Sustainability Standards Board) and supported by ASIC and APRA, will proceed as expected. That means large and medium-sized Australian companies — especially those with consolidated revenue over $50 million or more than 100 employees — need to prepare for staged compliance starting in FY25.

This is no longer just about sustainability — it’s about corporate financial risk. Climate change is being treated as a material financial issue, and the government’s position makes it clear: directors and executive teams will be expected to treat it that way too.

What this means for finance and sustainability teams

If you’re in finance, risk, legal, or sustainability, your responsibilities just expanded. Reporting will require cross-functional coordination, robust data systems, and board-level oversight. You’ll need to capture Scope 1, 2, and (in many cases) Scope 3 emissions, identify climate-related risks and opportunities, and provide forward-looking scenario analysis — all disclosed in line with global standards.

Teams that haven’t yet built foundational processes will now need to play catch-up. That includes setting appropriate boundaries for your reporting entities, engaging suppliers, evaluating climate risk exposures, and ensuring audit-ready documentation of emissions calculations. The companies that succeed here will be the ones that move quickly to formalise internal roles, align governance structures, and lock in high-quality emissions data.

What are organisations required to report?

Under the new mandatory climate disclosure regime, organisations will be required to report both historical emissions and forward-looking climate risk information. That includes Scope 1 and 2 emissions, and for many entities, material Scope 3 emissions across their value chain. In addition to emissions data, companies must disclose climate-related risks and opportunities, how those are being managed, and their potential financial impacts. Scenario analysis will be required to show how the business performs under different climate futures, and governance disclosures must explain how climate risk is embedded in board and management oversight. These requirements are designed to align closely with international frameworks such as the ISSB’s IFRS S1 and S2 standards and TCFD principles — ensuring consistency with global market expectations.

What is the reporting timeframe?

Mandatory climate disclosure is being rolled out in three stages, starting from FY25 (1 July 2024 – 30 June 2025) for Australia’s largest companies. This includes listed and unlisted entities that meet two of the following three criteria: over 500 employees, more than $1 billion in consolidated revenue, or more than $500 million in assets. The second group, starting in FY26, captures companies above the $200 million revenue or 250 employees threshold. By FY27, a large portion of the Australian economy will be subject to disclosure, including smaller listed entities and many private companies.

It’s a tight timeline, particularly for organisations starting from scratch or still maturing their ESG and climate capabilities. Those in Scope 1 of the phased rollout have already begun their reporting year, meaning the window for planning is effectively closed — implementation must now be underway.

Governance and director liability are now in scope

Beyond data and disclosures, this shift also places climate risk squarely within the remit of boards. Directors must now demonstrate how they oversee climate risk management and integrate it into strategic planning. This governance expectation is not just a formality—regulators are watching. ASIC has already flagged climate-related misstatements and omissions as potential areas of enforcement, and legal precedents around fiduciary duty and climate risk continue to build.

For boards and executive teams, this means the question is no longer “should we?” but “how fast can we?” Ensuring governance frameworks, internal controls, and board reporting align with the new requirements is now a core compliance task.

Support for every stage of your sustainability reporting journey

Whether you're ready to implement a carbon accounting platform or still laying the groundwork, Avarni is here to help. Our software automates the heavy lifting required for mandatory climate disclosures—streamlining emissions calculations, supplier engagement, and scenario analysis. It’s built to reduce the time, cost, and complexity of reporting, so your team can stay focused on strategy, not spreadsheets.

But we also know that not every organisation is ready to adopt software right away. That’s why we’ve created the most comprehensive set of free resources tailored to the Australian sustainability reporting landscape. These tools will help you assess your readiness, structure your data, and build a defensible, audit-ready process from the ground up.

Here’s what’s available to support your team:

📍 AASB S2 Roadmap Compliance Guide
‍An A-Z guide of each step you need to consider when preparing your sustainability report.

🔍 AASB S2 Reporting Gap Analysis Template
‍Provides a structured self-assessment tool to identify gaps in an organisation's current reporting capabilities against AASB S2 requirements.

🧭 Organisational Boundary Setting Template
‍Helps you document your organisation's entities, sub-entities, joint ventures, franchises & more, as well as ownership percentages and operational/financial control over each entity.

🌐 GHG Emission Sources Reference Guide
‍Provides finance and sustainability teams with comprehensive lists of potential emission sources by industry and activity type to ensure complete emissions inventories.

📊 Data to Disclosure Mapping Excel Template
Identify potential data sources and owners, the formats that the data could be in, the typical enterprise systems they are stored in, and the disclosure area they are relevant for.

📥 Data Collection Templates for Scope 1, 2 & 3 Emissions
‍Once you've identified data owners across the organisation with the data to disclosure mapping template, use this template to collect data from the owners in a consistent format, organised based on the GHG Protocol's scopes 1-3 and categories.

✅ AASB S2/ASRS Audit Preparation Checklist
‍Helps reporting teams prepare all necessary documentation and evidence for third-party assurance of climate-related disclosures.

🌡️ Climate Scenario Analysis Template
‍Guides finance and risk teams through the process of conducting climate scenario analysis to assess potential business impacts across different climate futures.

🎯 SBTi Carbon Reduction Target Setting Guide
‍Supports executive teams in establishing science-based targets aligned with global and national climate goals that are credible and achievable.

📖 ASRS Glossary and Terminology Guide
‍Ensures consistent understanding of technical terms across the organisation with plain-English explanations of climate reporting terminology.

Whether you’re just getting started or looking to accelerate compliance with automation, Avarni has you covered. Get in touch for more information and to get started.