Will Proposed Climate-Related Financial Reporting Impact Your Club?
- Policy
A growing number of clubs may find themselves subject to additional financial disclosure requirements in the not-so-distant future, with the Federal Government seeking to improve transparency from big business on their emissions.
In January 2024, the Federal Government released the Treasury Laws Amendment Bill 2024: Climate-related Financial Disclosure Exposure Draft (The Bill).
The Bill seeks to amend the Australian Securities and Investment Commission Act 2001 and the Corporations Act 2001 to introduce mandatory requirements for large organisations to disclose their climate-related risks and opportunities. These changes would affect certain member clubs.
ClubsNSW, through Clubs Australia, provided a submission emphasising that there are better opportunities to account for larger clubs, recognising their employee-intensive operations and not-for-profit status. We appreciate the feedback provided by clubs across Australia, which informed our response to the Australian Government.
Clubs Australia recommended:
- Increasing the reporting threshold with respect to the number of employees.
- Further clarification regarding ‘all reasonable and supportable information’ in ASRS (Australian Sustainability Reporting Standards).
- Supporting not-for-profit reporting entities through reporting templates and guidance materials.
Which clubs are impacted by these changes?
A three-phased implementation strategy has been proposed with the initial group of reporting entities required to lodge disclosures from 2024-25 onwards.
The first cohort includes clubs meeting at least two of three criteria:
- $500 million or more in consolidated annual revenue.
- $1 billion or more in consolidated gross assets.
- 500 or more employees at the end of financial year.
The types of reporting entities that would be affected by these changes can be found here. [1]
What needs to be disclosed?
Proposed reporting requirements include information concerning climate-related risks and opportunities and targets for reducing greenhouse gas emissions.
The exposure draft indicates that larger organisations would be required to prepare a ‘climate statement’, which includes details on the following:
- Material climate-related financial risks and opportunities the entity faces.
- Any metrics and targets of the entity related to climate including scope 1, 2 and 3 emissions of greenhouse gas.
- Governance or risk management processes, controls and procedures of the entity related to these matters.
How will disclosures be made?
The Federal Government has proposed that relevant organisations would include climate disclosures in their annual reports.
When will the Bill be introduced to Parliament?
Treasury is reviewing the feedback on the exposure draft and may seek additional input for any necessary provisions. It is expected that the Bill will be presented to Parliament this year.
In the meantime, clubs affected by the proposed changes may start considering whether they have the necessary information for their disclosures and an established framework to oversee matters relating to sustainability.
ClubsNSW, through Clubs Australia, will continue to engage with the Federal Government to ensure relevant clubs are supported once these changes come into effect.
[1] Treasury. 2024. ‘Mandatory climate-related financial disclosures: Policy position statement’.
