New climate impact disclosure laws will change sustainability governance

Large businesses will have to publicly disclose detailed information about what they are doing to reduce carbon emissions and other climate-related financial information under legislation before federal parliament.

Under the new legislation, companies will have to include a separate sustainability report in their annual report.

And, as with the financial component of the annual report, the sustainability document will be formally adopted by the company’s board.

The UN Climate Change Conference in Glasgow in 2021 (known as COP26) identified mandatory climate-related financial disclosure as necessary for combating climate change.

Disclosure makes a company’s climate-related risks, opportunities, metrics and targets transparent to its investors and other stakeholders.