• Australia is consulting on reforms to lower climate disclosure compliance costs while maintaining reporting quality and international comparability.
• Proposals include keeping limited assurance, delaying reasonable assurance to 2035, or applying stricter assurance only to mature metrics such as Scope 1 and 2 emissions.
• The government also wants clearer limits on Scope 3 data requests to reduce reporting pressure on suppliers and small businesses.

Treasury targets reporting costs

The Australian government is considering changes to its climate disclosure regime as companies move deeper into mandatory sustainability reporting.

The Treasury has opened a consultation on what it calls “efficiency-enhancing” measures. The reforms are intended to reduce compliance costs without weakening the credibility or comparability of corporate climate disclosures.

Three areas sit at the centre of the review. These are assurance requirements, guidance on key reporting concepts, and the burden of information requests across corporate supply chains.

The government said any changes would be sequenced to avoid disruption. That approach recognises the investment companies have already made to prepare for the new reporting framework.

Australia introduced mandatory climate-related reporting legislation in 2024. Requirements began applying in 2025 to the country’s largest companies and asset owners.

The regime requires companies to report climate risks and opportunities, alongside greenhouse gas emissions. Scope 3 emissions will also bring supply chains directly into the reporting process.

Assurance rules face review

One of the most significant questions concerns external assurance.

Australia’s existing framework is designed to move from limited assurance toward the more demanding reasonable assurance standard from mid-2030.

Treasury is now reviewing whether that transition should proceed as planned.

The government said it is “seeking evidence regarding the costs and benefits of the current assurance settings, including their impact on reporting entities, assurance providers and users of sustainability reports.”

One option would remove the planned transition altogether and retain limited assurance.

Another would delay reasonable assurance until 2035. This would give companies, auditors and data providers more time to strengthen reporting systems.

A third approach would apply reasonable assurance only to more established metrics. Scope 1 and Scope 2 emissions could fall into that category.

Less mature areas, including Scope 3 emissions, could remain subject to limited assurance.

The distinction matters for corporate costs. Reasonable assurance requires a higher level of audit evidence and typically involves more extensive controls, documentation and testing.

Scope 3 requests put SMEs in focus

Treasury is also examining how large companies gather emissions information from suppliers.

Reporting entities are expected to begin providing complete Scope 3 disclosures from their second reporting year. Current rules allow them to rely on “reasonable and supportable information… available without undue cost or effort.”

However, the government sees a risk that large reporting companies could pass significant data collection demands down their supply chains.

The consultation notes that “reporting practices observed overseas under similar disclosure requirements has highlighted the potential value of clearer boundaries on value-chain information requests.”

Treasury is therefore considering guidance on what constitutes a reasonable request for information.

That could give both reporting companies and SMEs greater certainty over which data can reasonably be demanded.

Another proposal would expand access to publicly available domestic emissions factors. Companies could use those factors as secondary data instead of repeatedly requesting detailed information from smaller suppliers.

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Broader reporting reform continues

The consultation follows changes announced with Australia’s 2026 Budget.

The government plans to increase thresholds for businesses required to publish audited financial and sustainability reports. Companies with revenue below A$100 million and assets below A$50 million would be exempt.

That threshold change sits outside the current consultation, but it reflects the same policy objective: reducing compliance costs while retaining climate transparency.

Treasury is also considering clearer guidance on concepts such as “reasonable and supportable information … without undue cost or effort” and declarations of “no material climate-related risks or opportunities.”

Additional workshops and educational programmes are also under consideration.

For corporate leaders, the consultation could reshape the cost and control environment around Australian sustainability reporting. Assurance requirements affect audit budgets, governance systems and internal reporting processes. Scope 3 rules determine how deeply those obligations extend into supplier networks.

For investors, the challenge will be balancing efficiency with data quality. Any reduction in reporting requirements will need to preserve confidence that disclosures remain credible and comparable.

Australia’s approach could carry influence beyond its domestic market. Governments globally are reconsidering how to make sustainability reporting workable without weakening climate-related information that investors increasingly use in capital allocation and risk assessment.