Australia Climate-Related Financial Disclosure (CRFD)
The proposal released by the Australian Accounting Standards Board (AASB) is intended to implement standardized, internationally aligned climate-related disclosure for large listed and unlisted companies and financial institutions. Scope 1, Scope 2, and Scope 3 inventories are to be included in the reporting requirements, however, disclosure of Scope 3 emissions would be required from the second reporting year onwards. The overall implementation will be a gradual process, with 2028 being the end of the proposed phased-in period.
Phased implementation and reporting thresholds
The new regime will apply to entities that are required to report under Chapter 2M of the Corporations Act 2001 and either are the “controlling corporations” under the NGER Act or meet the prescribed size criteria. The reporting thresholds will start relatively high before decreasing over time to capture a broader group of entities.
2024/2025
Entities that are required to report under Chapter 2M and fulfill at least two of the following criteria:
- 500+ employees
- Consolidated gross assets valued at Aus$1 billion+
- Consolidated revenue of Aus$500 million+
2026/2027
Entities that are required to report under Chapter 2M and fulfill at least two of the following criteria:
- 250+ employees
- Consolidated gross assets valued at Aus$500 million+
- Consolidated revenue of Aus$200 million+
2027/2028
Entities that are required to report under Chapter 2M and fulfill at least two of the following criteria:
- 100+ employees
- Consolidated gross assets valued at Aus$25 million+
- Consolidated revenue of Aus$50 million+
What’s Next?
Companies that already report using the Taskforce on Climate-Related Disclosures (TCFD) recommendations should be well placed to meet the new requirements, however, the disclosure proposed by the AASB will require more detailed information. Companies should act now to integrate quantitative metrics to facilitate climate disclosure to better prepare for further developments, including the upcoming release of the Australian reporting requirements.