Mandatory Climate Reporting: 2027 Matters More Than Many Australian Businesses Realise
Climate reporting is now a legislated requirement that is reshaping how organisations identify, manage and communicate climate related risks and opportunities. While many mid-sized businesses believe the new regime only affects large listed corporations, the reality is that the next phase of implementation will bring thousands more Australian organisations into scope.
What has changed?
Australia's mandatory climate reporting regime was passed into law in September 2024 and commenced from 1 January 2025 for the largest reporting entities. The framework requires eligible organisations to prepare a Sustainability Report alongside their annual financial statements and disclose climate related risks, opportunities, governance arrangements, strategy, risk management processes and emissions data.
The reporting requirements are based on the Australian Sustainability Reporting Standards (ASRS), particularly AASB S2 Climate-related Disclosures, which aligns closely with international IFRS sustainability standards.
Who needs to report?
The regime is being introduced in three stages.
Group 1 (commenced 1 January 2025)
Entities meeting at least two of the following:
More than 500 employees
More than $1 billion in assets
More than $500 million annual revenue
These organisations represent Australia's largest listed and private companies.
Group 2 (commenced 1 July 2026)
Entities meeting at least two of:
More than 250 employees
More than $500 million in assets
More than $200 million annual revenue
This phase is now underway and captures a significant proportion of larger privately owned businesses.
Group 3 (commences 1 July 2027)
Entities meeting at least two of:
More than 100 employees
More than $25 million in assets
More than $50 million annual revenue
This is where the most significant expansion occurs, bringing a large number of mid-sized businesses into the reporting framework.
Potential Group 3 threshold reforms are being considered
In 2026 the Federal Government announced its intention to consult on increasing proprietary company thresholds, potentially increasing the Group 3 asset threshold from $25 million to $50 million and revenue threshold from $50 million to $100 million. Importantly, these proposals are still subject to consultation and legislative change, and the current reporting timetable remains in place. Organisations should continue preparing on the basis of the existing July 2027 commencement date until any amendments are formally enacted.
“Organisations that understand their climate related risks and opportunities are better positioned to attract investment, secure contracts and demonstrate long term sustainability"
Why the 2027 rollout is significant
For many organisations, 2027 represents the point where climate reporting moves from being a "large corporate issue" to a mainstream business requirement.
The original Treasury estimates indicated that approximately 6,000 Australian entities would ultimately fall within the mandatory reporting regime once all phases were implemented.
Why this matters, even if you're not required to report
Businesses that do not meet the formal thresholds should be considering how they are going manage climate risk such as severe weather events, water restrictions, power outage and reputational damage due to being unprepared.
Climate reporting is fundamentally about business resilience. Investors, lenders, insurers, government agencies and major procurement panels are increasingly looking beyond traditional financial performance.
How Bluestone Advisory Partners Can Help
Climate reporting is rapidly evolving into a critical governance responsibility for boards and executive leaders. Bluestone Advisory Partners provides tailored support to help organisations navigate this landscape, from implementing practical climate risk registers through to assessing regulatory obligations, governance maturity, and gaps in oversight, risk management, and reporting frameworks. Our governance reviews and gap analyses offer boards a clear, practical pathway to understanding their responsibilities and strengthening organisational readiness.
