Treasurer Jim Chalmers has labelled the Coalition’s proposal to repeal mandatory greenhouse gas emissions reporting laws as “economic madness,” warning it would undermine investor confidence, hinder clean energy investment and limit Australia’s economic opportunities in achieving net zero emissions.
The reporting requirements, introduced on January 1, mandate large companies to disclose operational and energy-related emissions and assess their resilience to different climate scenarios.
"Burden on businesses"
Shadow Treasurer Angus Taylor criticised the measures, claiming they reduce Australia’s competitiveness and make it harder to attract capital.
“The burden on businesses is unnecessary and will diminish our ability to compete globally,” Taylor said.
Chalmers responded to Taylor’s claims saying, “Trashing these sensible laws will only create uncertainty for investors, undermine investment in cheaper and cleaner energy, and reduce the economic opportunities of net zero.”
“Our climate reporting laws are all about supporting more investment in cheaper and cleaner energy and helping companies manage climate risks,” he said.
Chalmers added that the regulations target only large businesses and are designed to align Australia with international standards while supporting the transition to a greener economy.
Mandatory climate risk disclosure laws are already in place in New Zealand, the United Kingdom (TADAWUL:4280) and the European Union.
Australia’s framework will expand by 2026 to cover scope 3 emissions — those generated along supply chains — despite concerns around compliance costs and data reliability. In the US, the Securities and Exchange Commission recently excluded scope 3 emissions from its proposed disclosure standards, citing similar concerns.
New disclosure laws supported by industry
The Coalition’s proposal to scrap the GHG emissions reporting laws has drawn criticism from business groups, who broadly support the new disclosure regime. While not perfect, the new disclosure laws reflect actions already being taken by many large businesses in response to investor queries.
Australian Industry Group CEO Innes Willox noted the framework reflects years of work by businesses and is consistent with international practices.
“Stability is vital so businesses know the rules, and support services can scale up effectively,” he said.
Willox emphasised the importance of maintaining a clear and consistent approach, while acknowledging challenges for upper-medium-sized firms yet to adapt.
Fortescue Metals (ASX:FMG) has expressed its support for emissions reporting, emphasising that global financial markets increasingly prioritise “carbon competitiveness.”
“Australia should seek to influence emissions reporting and climate standards for the benefit of Australians, not opt out of the discussion,” a spokesperson for the mining company said.
Critics of the Coalition’s proposal also include the Australian Chamber of Commerce and Industry and the Business Council of Australia, which highlighted the need for greater clarity and alignment with international standards. Both organisations, however, raised concerns about the cost of scope 3 reporting.
Australian Institute of Company Directors (AICD) head of policy Chris Gergis called for higher thresholds for mandatory reporting, recommending it apply to firms with $200 million in revenue, 250 employees, or $500 million in assets. Current laws will extend by 2027 to companies with $50 million in revenue, 100 employees, or $25 million in assets.
Consistent, comparable data
The Australian Council of Superannuation Investors highlighted the value of mandatory reporting in providing consistent, comparable data for investors.
“Investors use climate reporting data in risk assessments and decision-making. Mandating reporting delivers a clearer picture of how climate risks and opportunities are managed across the economy,” said CEO Louise Davidson.
Climate Change Minister Chris Bowen said, “These rules support businesses by giving them the stability they need to manage risks and seize opportunities in the transition to a low-emissions future”.
While the Coalition’s plan aligns with similar moves by other jurisdictions, including recent developments in the United States, Australian industry leaders warn that abandoning the framework would risk Australia’s global competitiveness in addressing climate risks and attracting sustainable investment.