Australia’s Treasury department has launched a public consultation aimed at improving the efficiency of corporate climate disclosures and reducing regulatory compliance costs while maintaining alignment with international standards.
The proposed reforms seek to minimise the practical financial and operational burdens associated with sustainability reporting without compromising data integrity. Treasury noted that potential measures could include legislative updates, implementation adjustments, or enhanced guidance to streamline how reporting entities identify, collect, verify, and report climate-related information.
A central focus of the consultation is the review of current assurance frameworks. Under existing rules, companies face a phased pathway requiring a progressive transition from limited assurance to a comprehensive, positive-opinion audit known as reasonable assurance across all disclosures by 2030. Treasury has put forward three distinct options for stakeholder feedback to address this timeline.
The first option proposes maintaining limited assurance as a permanent, mandatory requirement on an ongoing basis. Treasury indicated that reasonable assurance demands intensive capacity building within auditing firms and may impose costs that outweigh the benefits, particularly given current challenges surrounding primary data availability, evolving materiality practices, and the inherent uncertainty of forward-looking climate projections.
Alternatively, the second option suggests retaining the long-term objective of achieving reasonable assurance while extending the transition deadline from 2030 to 2035. This approach would grant businesses additional time to mature their internal systems and build necessary market auditing capacity, mitigating the risk of placing undue burdens on nascent reporting frameworks.
A third option introduces a two-tier assurance model that ties requirements directly to data maturity. Under this framework, the requirement for reasonable assurance would apply exclusively where data availability meets a defined baseline standard, such as for Scope 1 and Scope 2 emissions. Meanwhile, Scope 3 emissions reporting could remain subject to limited assurance due to the high cost and complexity associated with value-chain data collection.
In addition to assurance settings, Treasury is seeking feedback on how to standardise and rationalise value-chain information requests for Scope 3 emissions. The government aims to establish clearer guidance regarding the boundaries of required data and expectations around corporate judgement, ensuring reporting entities can access necessary climate risk insights without imposing disproportionate burdens on third parties across the supply chain.
