Australia’s Treasury is considering proposals to ease mandatory climate reporting requirements for large corporations following industry concerns about the high costs and administrative burdens involved. The move comes amid broader debates over how best to meet the country’s net zero emissions goal by 2050 while balancing economic and energy security priorities.
The current climate disclosure regime, initiated by the Albanese government, is scheduled to begin in January 2025. It requires large companies and asset managers to disclose climate-related risks, management strategies, and emissions targets—including indirect emissions known as Scope 3, which encompass supply chain and customer-related emissions. However, a recent review has suggested scaling back some obligations, specifically recommending that businesses not be required to report primary data on their Scope 3 emissions due to compliance challenges and costs.
The review also proposes postponing the mandatory audit of climate disclosures from 2030 to 2035 in order to align with international frameworks, notably following the European Union’s delay of similar sustainability reporting requirements. A further change under consideration is dropping a more rigorous auditing standard called “reasonable assurance,” as Treasury questioned whether the benefits justify the associated compliance costs, particularly given uncertainties around data availability and materiality judgments in climate reporting.
These developments reflect a degree of international retrenchment in corporate climate obligations. For example, the U.S. Environmental Protection Agency has recently removed guidance materials on Scope 3 emission reporting resources as part of wider rollbacks on climate regulations.
The debate follows recent corporate shifts, such as Woodside Energy’s August decision to abandon its Scope 3 investment and abatement targets under new CEO Liz Westcott, citing a strategic refocus. Similarly, major Australian banks like National Australia Bank are reassessing their support for carbon-intensive energy projects, with NAB’s chief executive Andrew Irvine advocating for increased domestic extraction and infrastructure investment in gas and liquid fuels.
On the policy front, the Albanese government is confronting multiple challenges in driving the green transition. Energy Minister Chris Bowen has acknowledged the need to reduce reliance on carbon credit subsidies and highlighted ongoing consultations on the Safeguard Mechanism—a regulation affecting about 220 of the country’s largest industrial emitters. The mechanism’s future design could enforce stricter emissions intensity reductions after 2030 to meet Australia’s interim targets for 2035.
In addition to regulatory adjustments, Bowen’s department has established a cross-agency taskforce to counter what it describes as “climate misinformation” that may be hindering progress on clean energy adoption. Meanwhile, a new lobby group formed by carbon market participants, Growing Australia’s Nature Economy, aims to address what it sees as misleading narratives around climate policy.
Treasurer Jim Chalmers has underscored the importance of mandatory climate reporting to provide investors and businesses with greater transparency and certainty as Australia navigates its net zero transition. Supporting this, a joint report by the CSIRO and the Australian Energy Market Operator has projected that electricity generation costs could rise by more than 50 percent after 2030 as the power sector moves toward net zero emissions by mid-century.