Australia has recently introduced significant updates to its climate disclosure laws as part of its broader efforts to align with global standards and address the growing concerns around climate change. The mandatory climate reporting legislation passed the Senate on 22nd August 2024, and the reporting will need to commence from 1 January 2025. 

These new regulations reflect a shift towards greater transparency and accountability, pushing companies to disclose more detailed information about their climate-related risks, opportunities, and strategies. The policy statement stressed on commitment towards improving the quality of climate-related financial disclosures, providing Australians and investors with greater transparency and more comparable information about an entity’s exposure to climate-related financial risks and opportunities and climate-related plans and strategies.

Whilst we will publish a dedicated blog highlighting the scope and dates for these new changes, it will be great to have a view on the current state of Sustainability initiatives of the different companies. Many of them have been proactive, setting benchmarks for sustainability and corporate responsibility. Below are examples of homegrown companies making significant strides:

BHP Group:

o Climate Strategy: BHP Sustainability | BHP, one of the world's largest mining companies, has committed to reducing its operational greenhouse gas emissions by 30% by 2030. The company is also investing in low-carbon technologies and initiatives aimed at reducing the carbon intensity of its operations.

o Sustainable MiningValue chain sustainability | BHP: BHP is leading efforts in sustainable mining practices, including the use of renewable energy in its operations and initiatives to rehabilitate mining sites to restore natural habitats.

Commonwealth Bank of Australia (CBA) Sustainability at CBA (commbank.com.au):

o Sustainable Finance Sustainability solutions - CommBank: CBA has integrated ESG considerations into its lending practices, offering green loans and sustainable finance options. The bank is also committed to aligning its portfolio with the Paris Agreement’s goals, aiming for net-zero emissions by 2050.

o Climate Risk Management: CBA is actively managing climate risks across its lending and investment portfolios. This includes stress testing against various climate scenarios to ensure resilience in its financial operations.

Woolworths Group:

o Zero Waste Initiatives: Woolworths, one of Australia's largest supermarket chains, has set ambitious targets to achieve zero food waste to landfill by 2025 Reducing hunger and food waste (woolworthsgroup.com.au). The company is also working on reducing plastic packaging and increasing the use of recycled materials in its productsDiscover our Reusable Bag Range | Discover with Woolworths.

o Sustainable Sourcing Sustainable sourcing (woolworthsgroup.com.au): Woolworths is committed to sourcing 100% of its own brand palm oil from certified sustainable sources and is working towards ensuring all seafood is sustainably sourced by 2025.

Telstra Corporation Telstra 2024 Bigger Picture Sustainability Report:

o Renewable Energy Commitment: Telstra, Australia's largest telecommunications company, has pledged to source 100% of its electricity from renewable sources by 2025. The company is also investing in energy efficiency measures to reduce its overall energy consumption.

o Digital Inclusion and Sustainability: Telstra is focused on digital inclusion Digital inclusion in remote First Nations communities - Telstra as part of its broader ESG strategy, ensuring that its services contribute to sustainable development goals, including providing connectivity to underserved communities while minimizing environmental impact.

Fortescue Metals Group:

o Green Hydrogen Leader: Fortescue Green hydrogen | Fortescue is at the forefront of the global green hydrogen movement, with plans to produce 15 million tonnes of green hydrogen per year by 2030. This initiative is part of its broader strategy to decarbonize its operations and support the global transition to renewable energy.

o Net Zero by 2030 Sustainability | Fortescue: Fortescue has set a goal to achieve net-zero emissions from its operations by 2030, well ahead of many global peers. This ambitious target includes investing in renewable energy projects and developing technologies to eliminate emissions from its mining processes.

 

Data Collection continues to be the primary challenge for companies in their path to reporting accurate and comprehensive climate-related data. Companies will need to leverage ESG platforms and processes to meet the disclosure requirements.Reporting on Scope 3 emissions, which include indirect emissions from a company’s value chain, is particularly challenging due to the difficulty in obtaining accurate data from suppliers and other third parties.

Sustainext, has global team in Australia who would help companies understand, set goals and navigate the challenges of ESG reporting. 

Conclusion

Australia’s new climate disclosure laws mark a significant step towards greater corporate accountability and transparency in addressing climate change. As these regulations come into effect, companies will need to adapt quickly, investing in data collection, reporting mechanisms, and sustainable practices to meet the requirements. The proactive efforts of Australian industry leaders demonstrate the opportunities that come with embracing ESG initiatives, not only to comply with regulations but also to drive long-term sustainability and business success.