ESG Legislation is coming – is your company ready?

For many companies, keeping on top of the changing ESG landscape can be a challenge. The 'E' in ESG for 'Environment' alone casts a wide net, but it's more than just the latest iteration of sustainability buzzword bingo -- Australia has committed to an emissions reduction target of 43% below 2005 levels by 2030, and to zero by 2050.

And this involves ensuring Australian companies take it seriously.

The Federal Government has released its second Climate-Related Financial Disclosures consultation paper, setting out the proposed design of Australia's mandatory climate reporting regime. The proposed regime is intended to implement standardised, internationally aligned reporting requirements via domestic standards and associated legislative amendments, including the Corporations Act 2001. The standards are intended to be aligned, as far as practicable, with the International Sustainability Standards Board's standard IFRS S2 Climate-related Disclosures (ISSB Climate Standard).

This amounts to responsibility for all reporting entities to disclose gross Scope 1 and 2 emissions for a reporting period, starting in 2024 for large organisations with revenue of $500 million or more. By 2027 this will include all businesses with a revenue of $50 million or more, which Treasury expects will encompass more than 20,000 companies. Further, all reporting entities will be required to disclose material Scope 3 emissions from their second reporting year onwards.

Ancillary to this, the Modern Slavery Act 2018 already requires companies with annual revenue of $100 million or more to report on how they are addressing and preventing modern slavery risks in their operations and supply chains. However, in May 2023 changes were tabled to the Act that included:

1. Lowering the reporting threshold from $100M to $50M
   
   
2. Requiring entities to report on modern slavery incidents
   
   
3. Amending the Act to require entities have a due diligence system in place  
   
   
4. Introducing penalties for non-compliance with statutory reporting requirements

About Veriscape:  

Our solutions have empowered organizations to seamlessly integrate hundreds of sites across the globe, enabling thousands of employees to manage millions of purchase requisitions and process trillions of dollars in business. Our experience and expertise in the field have been pivotal in the success of many businesses, and we take pride in our ability to deliver top-tier supply chain technology solutions that enable our clients to achieve their goals and thrive in a highly competitive market.