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

Schedule 4   Sustainability reporting

Part 4   Application and transitional provisions

Corporations Act 2001

145   In the appropriate position in Chapter 10

Insert:

Part 10.77 - Application and transitional provisions relating to Schedule 4 to the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024

Division 1 - Preliminary

1707 Definitions

In this Part:

amending Schedule means Schedule 4 to the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024.

first transitional period : if the start date occurs on 1 January 2025 or 1 July 2025, the first transitional period is the period that:

(a) starts on the start date; and

(b) ends on 30 June 2026.

Otherwise, there is no first transitional period .

second transitional period means the period that:

(a) starts on 1 July 2026; and

(b) ends on 30 June 2027.

start date means:

(a) if this section commences on or before 2 December 2024 - 1 January 2025; or

(b) if this section commences between 3 December 2024 and 1 June 2025 - 1 July 2025; or

(c) if this section commences on or after 2 June 2025 - the first 1 January or 1 July to occur 29 days or more after the day this section commences.

Division 2 - Sustainability reporting

1707A Application of amendments - place where sustainability records are kept

(1) If, under subsection 289A(4), an entity would be required to give ASIC notice before the end of the 12 months starting on the commencement of this section, that subsection has effect as if it required the notice to be given at the end of those 12 months.

(2) For the purposes of subsections 289A(3) and (4), if, at the commencement of this section, an entity keeps information at a particular place in this jurisdiction for the purposes of subsection 289A(2), the entity is taken:

(a) not to keep information at that place for that purpose immediately before that commencement; and

(b) to begin to keep information at that place for that purpose on that commencement.

1707B Application of amendments - sustainability reporting

(1) Section 292A, as inserted by Part 1 of the amending Schedule, applies to an entity for a financial year if:

(a) both of the following subparagraphs apply:

(i) the financial year commences during the first transitional period;

(ii) subsection (2) or (4) of this section applies to the entity for the financial year; or

(b) both of the following subparagraphs apply:

(i) the financial year commences during the second transitional period;

(ii) subsection 296B(2), (4) or (5) applies to the entity for the financial year; or

(c) the financial year commences on or after 1 July 2027.

Entities with new reporting for a financial year commencing during first transitional period

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

(a) the entity satisfies at least 2 of the following subparagraphs:

(i) the consolidated revenue for the financial year of the entity and the entities it controls (if any) is $500 million or more;

(ii) 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 $1 billion or more;

(iii) the entity and the entities it controls (if any) have 500 or more employees at the end of the financial year; and

(b) the entity is not a registered scheme, registrable superannuation entity or retail CCIV.

(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:

(a) the entity is:

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

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

(b) the entity's group meets the threshold mentioned in paragraph 13(1)(a) of that Act for the financial year; and

(c) the entity is not a registered scheme, registrable superannuation entity or retail CCIV.

Matters worked out in accordance with standards

(5) For the purposes of this section:

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

(b) consolidated revenue and the value of consolidated gross 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).

1707C Application of amendments - directors' declaration

(1) This section applies in relation to a financial year commencing during the 3 years starting on the start date.

(2) Subsection 296A(6) applies to an entity for the financial year as if the reference in that subsection to whether, in the directors' opinion, the substantive provisions of the sustainability report are in accordance with this Act were a reference to whether, in the directors' opinion, the entity has taken reasonable steps to ensure the substantive provisions of the sustainability report are in accordance with this Act.

1707D Limited immunity for statements in new sustainability reporting

(1) No action, suit or proceeding lies against a person in relation to:

(a) a protected statement; or

(b) a statement that is required to be made under a Commonwealth law and:

(i) is the same as a protected statement; or

(ii) differs from a protected statement only in so far as it contains updates or corrections to the protected statement.

(2) Subsection (1) does not apply to an action, suit or proceeding if it is any of the following:

(a) criminal in nature;

(b) brought by ASIC.

Meaning of protected statement

(3) A statement is a protected statement if it is:

(a) made:

(i) in a sustainability report, for a financial year commencing during the 3 years starting on the start date, for the purpose of complying with a sustainability standard; or

(ii) in an auditor's report of an audit or review of a sustainability report mentioned in subparagraph (i) of this paragraph for the purposes of complying with this Act or the auditing standards; and

(b) about any of the following:

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

(ii) scenario analysis (within the meaning given by sustainability standards made for the purposes of this subparagraph);

(iii) a transition plan (within the meaning given by sustainability standards made for the purposes of this subparagraph).

(4) A statement is also a protected statement if it:

(a) is made:

(i) in a sustainability report, for a financial year commencing during the 12 months starting on the start date, for the purpose of complying with a sustainability standard; or

(ii) in an auditor's report of an audit or review of a sustainability report mentioned in subparagraph (i) of this paragraph for the purposes of complying with this Act or the auditing standards; and

(b) relates to climate; and

(c) at the time it is made, is about the future.

Division 3 - Audit and review

1707E Accounting standards must deal with audit and review of sustainability reports before 1 July 2030

(1) This section applies in relation to a sustainability report for a financial year commencing on or before 30 June 2030.

AUASB must make standards to specify the extent of, and provide for, audit and review of sustainability reports

(2) The AUASB must make auditing standards under section 336 that:

(a) specify:

(i) the extent to which the sustainability report must be audited; or

(ii) that the sustainability report is not required to be audited to any extent; and

(b) specify:

(i) the extent to which the sustainability report must be reviewed; or

(ii) that the sustainability report is not required to be reviewed to any extent; and

(c) if a sustainability report must be audited or reviewed to any extent - provide standards for such audits or reviews.

Modified references to audit and review

(3) Paragraph 301A(a) or 715(2A)(b) has effect as if the reference to audited in that paragraph were a reference to:

(a) audited to the extent (if any) required by the auditing standards; and

(b) reviewed to the extent (if any) required by the auditing standards.

(4) If the AUASB makes auditing standards for the purposes of subsection (2) of this section that require a sustainability report to be reviewed to any extent, references in this Act and the ASIC Act (other than in sections 307AA and 309A of this Act and this section):

(a) to audit include a reference to a review of a sustainability report; and

(b) to an auditor's report include a reference to an auditor's report under section 1707F(2).

(5) Section 307AA has effect as if:

(a) the reference in paragraph 307AA(a) to the sustainability report were a reference to the sustainability report to the extent (if any) that it is required to be audited by the auditing standards; and

(b) the reference in paragraph 307AA(c) to audited were a reference to audited to the extent (if any) required to by the auditing standards.

(6) Subsection 309A(1) has effect as if the reference in that subsection to whether the auditor is of the opinion that the sustainability report is in accordance with this Act were a reference to whether the auditor is of the opinion that the sustainability report, to the extent (if any) that it is required to be audited by the auditing standards, is in accordance with this Act.

1707F Review of sustainability report before 1 July 2030

(1) This section applies in relation to a sustainability report for a financial year if the AUASB makes auditing standards for the purposes of subsection 1707E(2) that require the sustainability report to be reviewed to any extent.

(2) An auditor who reviews the sustainability report must report to members in accordance with subsections (3), (4) and (5) of this section on whether the auditor became aware of any matter in the course of the review that makes the auditor believe that the sustainability report, to the extent that it is required to be reviewed by the auditing standards, does not comply with Division 1 of Part 2M.3.

(3) A report under subsection (2) must:

(a) describe any matter referred to in subsection (2); and

(b) say why that matter makes the auditor believe that the sustainability report, to the extent that it is required to be reviewed by the auditing standards, does not comply with Division 1 of Part 2M.3.

Requirements for report

(4) The auditor's report must include any statements or disclosures required by the auditing standards for the purposes of this section.

(5) The auditor's report must specify the date on which it is made.

Offences

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

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

Division 4 - Review of operation of laws

1707G Review of operation of laws

(1) The Minister must cause a review of the operation of the amendments made by the amending Scheduleto be conducted.

(2) The review must be conducted as soon as practicable after 1 July 2028.

(3) The Minister must cause a written report of the review to be prepared.

(4) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.