Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (87 of 2024)

Schedule 4   Sustainability reporting

Part 1   Sustainability reporting

Corporations Act 2001

26   After section 296

Insert:

296A Contents of annual sustainability report

Basic contents

(1) The sustainability report for a financial year consists of:

(a) the climate statements for the year; and

(b) any notes to the climate statements; and

(c) any statements required under subsection (5); and

(d) any notes to the statements mentioned in paragraph (1)(c) required under subsection (5); and

(e) the directors' declaration about the statements and the notes.

Climate statements

(2) Subject to section 296B, the climate statements for the year are the climate statements in relation to the entity required by sustainability standards made for the purposes of this subsection.

Notes to climate statements

(3) A sustainability report must include the following notes to the climate statements:

(a) any disclosures required under subsection (4);

(b) any notes, required by sustainability standards made for the purposes of this paragraph, in relation to:

(i) the preparation of the climate statements; or

(ii) anything included in the climate statements; or

(iii) other matters concerning environmental sustainability;

(c) notes containing any other information necessary to ensure that the climate statements and notes together make the disclosures required by section 296D.

(4) The Minister may, by legislative instrument, require a sustainability report to include specified disclosures in relation to:

(a) the preparation of the climate statements; or

(b) anything included in the climate statements.

Other statements and notes

(5) For the purposes of paragraphs (1)(c) and (d), the Minister may, by legislative instrument, require a sustainability report to include:

(a) statements relating to financial matters concerning environmental sustainability; and

(b) notes to the statements.

Directors' declaration

(6) The directors' declaration is a declaration by the directors as to whether, in the directors' opinion, the substantive provisions of the sustainability report are in accordance with this Act, including:

(a) section 296C (compliance with sustainability standards etc.); and

(b) section 296D (climate statement disclosures).

(7) The declaration must:

(a) be made in accordance with a resolution of the directors; and

(b) specify the date on which the declaration is made; and

(c) be signed by a director.

Note: Section 1228 deals with directors' resolutions for CCIVs.

296B Contents of climate statements - statement about there being no financial risks or opportunities relating to climate

(1) Despite subsection 296A(2), if, for a financial year:

(a) there are none of the following for the entity:

(i) material financial risks relating to climate;

(ii) material financial opportunities relating to climate; and

(b) none of subsections (2), (4) and (5) of this section apply to the entity;

the climate statements for the year are:

(c) a statement of the circumstance mentioned in paragraph (a) of this subsection; and

(d) a statement explaining how paragraph (a) of this subsection applies to the entity for the financial year.

Entities to which subsection (1) does not apply

(2) This subsection applies to an entity for a financial year if it satisfies at least 2 of the following paragraphs:

(a) the consolidated revenue for the financial year of the entity and the entities it controls (if any) is $200 million or more;

(b) the value of the consolidated gross assets at the end of the financial year of the entity and the entities it controls (if any) is $500 million or more;

(c) the entity and the entities it controls (if any) have 250 or more employees at the end of the financial year.

(3) In counting employees for the purposes of subsection (2), take part-time employees into account as an appropriate fraction of a full-time equivalent.

(4) This subsection applies to an entity for a financial year if it is:

(a) a registered corporation under the National Greenhouse and Energy Reporting Act 2007 at the end of the financial year; or

(b) required to make an application to be registered under subsection 12(1) of that Act in relation to the financial year.

(5) This subsection applies to an entity for a financial year if:

(a) the entity is a registered scheme, registrable superannuation entity or retail CCIV; and

(b) the value of assets at the end of the financial year of the entity and the entities it controls (if any) is $5 billion or more.

(6) For the purposes of this section, the question of whether there are any of the following for an entity is to be worked out in accordance with sustainability standards made for the purposes of this subsection:

(a) a material financial risk relating to climate;

(b) a material financial opportunity.

(7) For the purposes of this section:

(a) the question whether an entity controls another entity is to be decided in accordance with accounting standards made for the purposes of paragraph 295(2)(b); and

(b) consolidated revenue, the value of consolidated gross assets and the value of assets are to be calculated in accordance with accounting standards in force at the relevant time;

(even if the standards do not otherwise apply to the financial year of some or all of the entities concerned).

296C Compliance with sustainability standards etc.

(1) The substantive provisions of the sustainability report must comply with:

(a) sustainability standards made for the purposes of this paragraph; and

(b) any further requirements determined under subsection (2) of this section.

(2) For the purposes of paragraph (1)(b) of this section, the Minister may, by legislative instrument, determine requirements in relation to the substantive provisions of a sustainability report.

296D Climate statement disclosures

(1) The climate statements for a financial year, and the notes to the climate statements, must together disclose all of the following:

(a) any:

(i) material financial risks there are for the entity; or

(ii) material financial opportunities relating to climate there are for the entity;

that are required to be disclosed by sustainability standards made for the purposes of this paragraph;

(b) any metrics and targets of the entity relating to climate that are required to be disclosed by sustainability standards made for the purposes of this paragraph, including metrics and targets relating to:

(i) scope 1 greenhouse gas emissions; or

(ii) scope 2 greenhouse gas emissions; or

(iii) scope 3 greenhouse gas emissions (including financed emissions);

(c) any information that:

(i) is about governance of, strategy of, or risk-management by, the entity in relation to the risks, opportunities, metrics and targets mentioned in paragraphs (a) and (b); and

(ii) is required to be disclosed by sustainability standards made for the purposes of this paragraph.

(2) For the purposes of this section, the question of whether there are any of the following for an entity is to be worked out in accordance with sustainability standards made for the purposes of this subsection:

(a) a material financial risk relating to climate;

(b) a material financial opportunity relating to climate.

(2A) Subsection (2B) applies if sustainability standards made for the purposes of subsection (1) require the disclosure of:

(a) a scenario analysis (within the meaning given by sustainability standards made for the purposes of this paragraph); or

(b) information derived from a scenario analysis; or

(c) information about a scenario analysis.

(2B) For the purposes of subsection (1), a disclosure of a scenario analysis, information derived from a scenario analysis or information about a scenario analysis is taken not to satisfy that requirement unless the scenario analysis is carried out using at least both of the following scenarios:

(a) the increase in the global average temperature well exceeds the increase mentioned in subparagraph 3(a)(i) of the Climate Change Act 2022;

(b) the increase in the global average temperature is limited to the increase mentioned in subparagraph 3(a)(ii) of that Act.

(3) This section does not apply if subsection 296B(1) applies for the financial year.

296E ASIC directions

Giving directions

(1) If ASIC considers that a statement made by an entity in a sustainability report is:

(a) incorrect; or

(b) incomplete; or

(c) misleading in any way;

ASIC may, by written notice given to the entity, direct the entity to do any of the following:

(d) confirm to ASIC that the statement is correct or complete;

(e) explain to ASIC the statement;

(f) give to ASIC information or documents that could substantiate or support the statement;

(g) correct, complete or amend the statement in accordance with the direction;

(h) if ASIC directs the entity to correct, complete or amend the statement:

(i) publish the corrected, completed or amended statement in accordance with the direction; or

(ii) give the corrected, completed or amended statement to specified persons in accordance with the direction.

(2) The entity must comply with the direction.

(a) within the time specified in the direction, which must be a reasonable time; or

(b) if the direction does not specify a reasonable time - within a reasonable time.

(3) ASIC may extend the time within which the entity must comply with the direction by written notice given to the entity.

(4) Before giving to an entity a notice that includes a direction under paragraph (1)(g), or both a direction under paragraph (1)(g) and a direction under paragraph (1)(h), ASIC must give the entity an opportunity:

(a) to appear, or be represented, at a hearing before ASIC that takes place in private; or

(b) to make submissions to ASIC on the matter.

Varying and revoking directions

(5) ASIC may vary a direction given under subsection (1) in like manner and subject to like conditions.

(6) ASIC may revoke a direction given under subsection (1) by written notice given to the entity.

Publication of directions

(7) As soon as practicable after giving, varying or revoking a direction mentioned in paragraph (1)(g), ASIC must publish a notice of its action on its website.

Offences

(8) An offence based on subsection (2) is an offence of strict liability.

Note: For strict liability, see section 6.1 of the Criminal Code.