A year in review: The year ESG and Climate-Related Financial Disclosures were redefined

2024 marked a pivotal shift in how companies around the world, including in Australia, are expected to disclose environmental and climate-related risks. What was once seen as a voluntary or investor-driven initiative is now becoming a regulated, strategic imperative, with continued momentum heading into 2025.

This year saw the maturing of ESG and climate-related financial disclosure into something more than a reporting exercise — it became a foundation for credibility, resilience, and long-term value. With the release of global standards like International Financial Reporting Standards (IFRS) S1 and S2, and mounting investor pressure for consistent, comparable data, the landscape was not just updated — it was redefined.

In Australia, regulators like the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are aligning with global frameworks, pushing businesses to move beyond checkbox compliance. Instead, boards, CFOs, and sustainability leaders are being asked to link climate impacts to financial performance, transition plans, and strategic decision-making. As assurance and anti-greenwashing scrutiny grew, so did the expectation for rigor, relevance, and results.

In this year-in-review, we explore the major developments that shaped ESG and climate-related financial disclosures — and what they mean for the road ahead.

At a glance

Understanding your responsibility under new legislation

Australia’s new mandatory climate-related financial disclosures will help businesses provide clearer insights into climate risks and opportunities. These disclosures will align with global standards and are designed to boost investor confidence and support the shift to a net-zero economy.

Starting 1 July 2025, businesses that meet certain criteria (e.g., revenue of $50 million or more, assets of $25 million or more, or 100+ employees) will be required to include climate-related information in their annual sustainability and financial reports. Regulators will be empowered to act if companies fail to meet these requirements.

The phased rollout will ensure companies are well-prepared to meet the new obligations, enhancing transparency and fostering investment in Australia’s green transition.

Learn more with:

1. ESG in 2025: Why it matters more than every before
2. Unlocking ESG: Why it matters and how to enhance compliance
3. Aligning with global standards: A practical ESG guide for every organisation
4. ESG Roadmap: Courses you need to comply
5. Your essential ESG whitepaper: Key insights for Australian businesses
6. Compliance Corner Podcast | Future proof or fall out: The ESG question

Summary of changes

Mandatory Climate-Related Financial disclosures

• As of 1 January 2025, large Australian companies and financial institutions (Group 1 entities) are required to incorporate climate-related financial disclosures into their annual reports. This mandate follows the enactment of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024, which received Royal Assent on 17 September 2024.
• Group 2 and Group 3 entities, as defined under the Corporations Act, will be required to comply in subsequent reporting years as part of a phased implementation approach.
• The disclosures must align with the Australian Sustainability Reporting Standards (ASRS), specifically:
  • AASB S1: Sustainability-related Financial Information
  • AASB S2: Climate-related Disclosures
• These standards are based on the international IFRS S1 and S2 issued by the International Sustainability Standards Board (ISSB), supporting alignment with global disclosure requirements.
• The standards require entities to report on:
  • Climate-related risks and opportunities
  • Their governance, strategy, and risk management processes
  • Metrics and targets, including greenhouse gas emissions.
• The implementation of these standards is expected to enhance transparency, accountability and investor confidence, by providing consistent and comparable information on how companies are addressing climate-related issues. This move aligns Australia with other jurisdictions, including the EU, UK, New Zealand, and Japan, in establishing a rigorous and internationally aligned climate disclosure regime.
• The Australian Securities and Investments Commission (ASIC) will be responsible for compliance and enforcement.
• Company directors may be held accountable for misstatements or omissions in sustainability disclosures, in line with existing obligations under the Corporations Act.
• To support compliance, entities are encouraged to proactively engage with these requirements and prepare for the upcoming reporting obligations.