Mandated Reporting Coming Soon: Here’s what you need to know

I know, it’s like all the various changes to our tax regime, we don’t like it, we don’t want it and we sure as eggs don’t want more impositions on our already hectic schedules.

But, the powers that be, aka Federal Parliament, have not one but three bills on the table which relate to carbon reporting. The key bill is referenced as the Mandatory Disclosures Bill. Due to the timing of this bill, the start date has been pushed back to 1 January 2025 from the original 1 July 2024.

The first round of mandated disclosures applies to large listed and unlisted companies. Great you say, that’s not me. But, and here’s the big but, over the coming few years, those large companies will be requesting carbon emissions data from their suppliers and that’s where you do come in.

Forewarned is forearmed as the saying goes. My take is, it’s time to get your house in order. It’s time, now, to look at the way you capture your data and start implementing changes so that your data entry includes the relevant information needed for carbon reporting. This will make it so much easier to undertake the reporting requirements.

The second bill is the Net Zero Economy Authority Bill 2024 which will establish an independent authority “to foster a positive and orderly economic transition as the world moves towards decarbonisation”. 

Bottom line. We’re on this ride to carbon net zero whether we want to be or not. It feels to me just like when the Superannuation Guarantee Charge came into effect. There was a lot of pushback from the business community and specifically clients who didn’t think it was right or fair. As I said then, and I’ll say it again now, it isn’t whether you agree with the legislation, whether you agree with the context of the decisions behind it or not. It’s law (and in this case, it will be law) and you will be required to comply.

From a more practical point of view, I believe that future buying decisions will not only be made based on the financial cost, but also on the carbon cost to the company. Where large companies are stating that they are working towards the target of net zero emissions, there are only two ways they can achieve it.

One way is to buy carbon credits. This is costly and the availability of those carbon credits will not be sufficient to offset all of the world's needs to get to net zero. It may be a factor and part of an overall strategy by a company to help reduce its carbon footprint, but it isn’t the real answer.

The second way is to reduce the carbon footprint of their costs, whether that is in their internal processes or the costs associated with their supply chain.

In my view, the time is ripe for every medium-sized business to identify its current carbon footprint and start working towards reducing it in the next few years. In that way, when asked for your carbon data, you’ll be one of the good guys with a low carbon footprint emission factor and will go to the top of the list of preferred suppliers.

Businesses which fail to understand the importance of this and fail to take steps in the immediate future run the risk of losing contracts to their competitors who got a few steps ahead and have reduced their carbon footprint.

Now’s the time to take action and reach out to us to discuss your options. 

We are proud to advise that this article was written by the team and not produced by AI.