Keeping Up with ESG in Australia – August 2026

Our monthly ESG bulletin provides a targeted snapshot of key developments we see as reflecting the “must know” trends in the Australian market. In this edition, we spotlight the release of the Attorney-General’s Modern Slavery Consultation Paper. 

Key highlights

1. In the Spotlight: Release of consultation paper for criminal offence for modern slavery in supply chains
2. Australian Government ends Climate Active certification program
3. North West Shelf extension climate cases – judgment reserved
4. Victorian Government approval of Cultural Heritage Management Plan was made in error
5. Climate Study Group ad in breach of Environmental Claims Code
6. Just Transition plan sought for Yallourn Power Station closure
7. Australia's first National Environmental Standards
8. New AASB educational material published regarding transition plans
9. NSW is unlikely to meet emissions reductions targets due to coal mine and data centre expansion
10. Release of draft ASX Corporate Governance Principles and Recommendations (5th edition)
11. AI Wearables in the Workplace: What employers need to know
12. Clean Energy Council's mandatory renewable energy proposal for new data centres
13. UK modern slavery reform proposal for mandatory criteria and penalties
14. ALP's 50th National Conference: Key employment and industrial relations reform proposals

15. Australian Government consulting on changes to improve the efficiency of the sustainability reporting framework

     

In the Spotlight: Release of consultation paper for criminal offence for modern slavery in supply chains

On 21 August 2026, the Attorney-General's Department released a consultation paper proposing changes to enhance corporate accountability for preventing modern slavery in supply chains. As foreshadowed, the consultation paper proposes a new offence where companies with an annual consolidated revenue over $100 million could be found criminally liable for modern slavery in their supply chains unless the company has taken reasonable steps to prevent the criminal conduct. 

The consultation paper seeks feedback from stakeholders on nine core components of the proposed ‘failure to prevent’ offence and notes similarities with the existing foreign bribery failure to prevent model. Key aspects of the proposal include:

• Corporate liability only: The offence would not directly apply to directors or other office holders within a corporation, which will be welcome news for Board members and other senior executives. 
• Fault element: There is an open question as to whether the offence should be one of absolute liability, strict liability (i.e. a mistake of fact defence would be available) or use a recklessness standard. 
• Nexus between criminal conduct and corporation: It is proposed that the underlying criminal conduct should have a sufficient nexus to (a) the corporation’s sourced products or services, and (b) the corporation’s conduct (for example, the corporation’s activities caused, contributed, facilitated or enabled the criminal conduct).
• In our view, a key question to be resolved here is whether a corporation could be liable for the conduct of suppliers beyond ‘Tier 1’ where there may not be a contractual or other traditional relationship (e.g. employee or agent of the corporation). 
• Defence: A defence would apply where a corporation can demonstrate on the balance of probabilities it had taken reasonable steps to prevent modern slavery, which would be determined on a case-by-case basis. There is little detail on what ‘reasonable steps’ may involve, or whether these would be enshrined in legislation, but the consultation paper indicates that the responsible Minister would be required to issue clear guidance on what steps a corporation could take. 
• Timing: Commencement of the proposed offence would be delayed for a period of 12–18 months following enactment to allow corporations time to implement necessary changes to their supply chain management practices.

The consultation paper also discusses the possibility of introducing Deferred Prosecution Agreements (DPAs) as an alternative option to address non-compliance. A DPA would provide an additional enforcement tool, with criminal proceedings being deferred against a business, subject to the business complying with agreed conditions within a specified timeframe. DPAs would be entirely novel in Australia although have been the subject of prior law reform consultations in the context of foreign bribery laws, and are available as an enforcement option in many other jurisdictions including the US, UK and France. 

We are preparing a submission in response to the consultation and are keen to hear feedback from clients on the proposed offence. 

The consultation period closes at midnight (AEST) on Friday, 25 September 2026.

Australian Government ends Climate Active certification program

The Australian Government has announced that it will be ending certification of voluntary climate claims through the Climate Active program. Certification is proposed to end on 30 June 2027 following a transitional period. 

The Government is consulting on two proposed options: 

1. to close the program entirely; or 
2. to close the program, but permit the Department of Climate Change, Energy, the Environment and Water (DCCEEW) to retain some voluntary standards and select guidance. 

The Climate Active Carbon Neutral standards as they currently exist will be discontinued. Once the changes come into effect, DCCEEW will no longer review or monitor any claims made about Climate Active or Carbon Neutral certification.

This development signals a shift in the approach to verification of climate-related claims in Australia. In particular, the decision was made in response to mandatory climate-related disclosure requirements, international guidance frameworks that support voluntary climate action and increased demand for direct emissions reduction from stakeholders. For entities that have previously relied on the Climate Active program, it may be appropriate to reassess the basis for climate-related claims and any assurance, verification or certification mechanisms supporting those claims.

Public consultation closes at 5:00pm (AEST), 18 September 2026.

North West Shelf extension climate cases – judgment reserved

The Federal Court has reserved judgment in three judicial review proceedings challenging the Federal Minister for the Environment and Water’s approval of the North West Shelf gas project extension. The project would generate approximately 87.9 million tonnes of CO₂-e per year and sits adjacent to the Murujuga rock art complex, a World Heritage-listed site. Three judicial review applications were heard concurrently before Justice Button in the Federal Court of Australia from 21 to 24 July 2026. The Australian Conservation Foundation is the applicant in two separate proceedings, and Friends of Australian Rock Art Inc are the applicant in a third set of proceedings. 

The proceedings raised multiple grounds of review and also involved an unsuccessful submission to disclose the Minister’s diary entries of meetings regarding the project’s approval. In addition, the UN Special Rapporteur on the Human Right to a Healthy, Safe and Sustainable Environment was granted leave to appear as amicus curiae (friend of the court), providing written submissions on Australia’s international legal obligations and their relevance to the construction of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).

With judgment now reserved, the outcome may have significant implications for how indirect climate impacts are assessed under the EPBC Act. 

Victorian Government approval of Cultural Heritage Management Plan was made in error

Wadi Wadi Man, Vince Kirby, has successfully challenged the Victorian Government’s approval of a Cultural Heritage Management Plan (CHMP) for part of the Nyah floodplain engineering project (the Nyah Project) in the Supreme Court of Victoria. 

Background

The Nyah Project is part of the Victorian Government's Murray Floodplain Restoration Project under its Murray-Darling Basin Plan. The Nyah Project will artificially divert river flow to selected floodplains using channels, pumps, and flow regulators to support seasonal wetting. Native vegetation and animals rely on floodplains, which have deteriorated in recent years.

CHMPs are required for projects requiring an Environmental Effects Statement, or projects that otherwise involve a 'high impact activity' in an area of cultural heritage sensitivity, as defined under the Aboriginal Heritage Act 2006 (Vic). CHMPs are typically approved by the relevant Registered Aboriginal Party (RAP), however, there is currently no RAP for the Nyah Project area. The CHMP was therefore assessed by the Secretary of the Department of Premier and Cabinet. 

Basis of legal challenge

Mr Kirby challenged the CHMP approval, on the basis that the Nyah Project risks permanent harm to culturally significant places on Country, the approval process failed to properly identify, assess or protect Aboriginal cultural heritage, and did not adequately consult Traditional Owners before works were approved. Mr Kirby submitted that the Victorian Government's decision to approve the CHMP breached his human rights as a Wadi Wadi person and failed to consider his rights under the Charter of Human Rights and Responsibilities Act 2006 (Vic). 

The Victorian Government gave an undertaking that while the Court considered the application, works on the Nyah Project would not commence. 

Secretary concedes error and a new case upstream

The Secretary and the Lower Murray Water Authority conceded that Traditional Owners were not properly consulted, and the CHMP was made in error. Nyah Project works cannot proceed until the CHMP is prepared in consultation with Wadi Wadi Traditional Owners and approved by the Secretary.

Mr Kirby has now filed a second complaint in relation to the Vinifera floodplain engineering project, situated four kilometres upstream from the Nyah Project. In the Vinifera case, Mr Kirby has indicated he will argue that the CHMP did not properly assess Aboriginal cultural heritage. 

Climate Study Group ad in breach of Environmental Claims Code

The Australian Ad Standards Community Panel (Panel) has published a decision in relation to a print advertisement run by the Climate Study Group titled “The Fossil Fuel CO2 Cycle”. Some of the claims of the advertisement include that current global CO₂ levels have declined to near record lows, that achieving ‘Net Zero CO₂’ would negatively impact plant nutrition, and that CO₂ emitted from fossil fuel production and use cannot exceed the CO₂ captured by vegetation.

Complaints were received on the grounds that the advertisement was factually incorrect and sensationalist, spread misinformation about the impact of carbon emissions on the environment, and made false and dangerous claims that fossil fuel use benefits the natural world and that achieving Net Zero would have a negative impact.

The Panel found that the advertisement was in breach of section 1 of the Australian Association of National Advertisers’ Environmental Claims Code, as the advertisement created a misleading overall impression about the benefit of continued CO₂ emissions and fossil fuel use. The Panel considered that the advertisement was misleading because it suggested that fossil fuel emissions are environmentally beneficial or necessary merely because CO₂ is relevant to plant life, depicted CO₂ emissions through a circular graph in a manner that implied a self-sustaining loop comparable to renewable energy, and relied on comparisons with geological periods millions of years ago without acknowledging the different environmental conditions of those eras and the absence of human industry. The Panel also found that the advertiser's reference document was better characterised as an ‘opinion piece’ rather than a peer-reviewed scientific article, with the conclusions appearing to conflict with the current scientific consensus. 

The advertiser has committed to amending its advertisement to better contextualise its intended message.

Just Transition plan sought for Yallourn Power Station closure

The Net Zero Economy Authority (NZEA) is seeking a Fair Work Commission (FWC) determination to support workers affected by the closure of EnergyAustralia’s Yallourn Power Station in Victoria’s Latrobe Valley. On 30 June 2026, the NZEA Chief Executive Officer lodged an application under s 56(1) of the Net Zero Economy Authority Act 2024 (Cth) (NZEA Act), requesting that the FWC make a community of interest determination in relation to the brown coal-fired facility. The Power Station is scheduled to close by 1 July 2028 and currently generates around 20% of Victoria’s electricity. 

If granted, the determination would formally establish an Energy Industry Jobs Plan (EIJP) and place obligations on included employers to support their employees through the transition. The application names EnergyAustralia as the closing employer, together with 15 dependent employers across the station’s supply chain, collectively employing 91% of workers identified as potentially impacted by the closure. Under an EIJP, workers can request access to supports from their employers to prepare for their next role, which may include: 

• access to training, career planning and financial advice; 
• flexible work arrangements or paid time off to access those supports; and 
• grant incentives for local businesses that hire workers impacted by the closure. 

The application follows the first community of interest determination, made in November 2025 in relation to the closure of the Torrens Island B Power Station in South Australia: see our article here. The NZEA lodged a further application in March 2026 in relation to the closure of Origin Energy’s Eraring Power Station in New South Wales. 

The Yallourn application has attracted a range of views from stakeholders. The FWC has listed the matter for hearing on 27 August 2026 and will hear from businesses, workers, and other groups affected by the closure before making its determination. 

The application reinforces the need for employers in the energy and related supply chain sectors impacted by decarbonisation to proactively plan for workforce transitions, including identifying roles most at risk, developing retraining and redeployment strategies at an early stage, and engaging constructively with employees and unions to ensure tailored support and compliance with evolving obligations. As noted in our April 2026 update on the statutory review of the EIJP report, employers and regional stakeholders should monitor developments closely. Just transition issues are emerging in bargaining claims, and are likely to drive further legislative and industrial change.

Australia's first National Environmental Standards

The Albanese Government has made Australia's first National Environmental Standards (the Standards) marking a significant milestone in the reform of Australia's national environmental law under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). The four new Standards are:

1. Matters of National Environmental Significance: establishing a mitigation hierarchy requiring decision-makers to avoid, mitigate and repair environmental damage before considering offsets for unavoidable impacts;
2. Environmental Offsets: providing a consistent framework for approving offsets that compensate for unavoidable environmental harms and deliver a net gain for the environment;
3. Community Engagement: requiring early, open and honest communication with communities throughout the assessment process and encouraging collaborative approaches; and
4. Data and Information: requiring that environmental data underpinning decisions is representative, transparent, comparable, reusable and ethical.

The Standards are structured so that they cannot be amended in a manner that would reduce environmental protection, data quality or consultation integrity. From 24 August 2026, the Standards apply to new bilateral agreements with states and territories, and from 1 December 2026, they will apply to individual project assessments and approvals alongside the remainder of the Government's broader EPBC Act reform package.

New AASB educational material published regarding transition plans

In July 2026, the Australian Accounting Standards Board (AASB) published new educational material on 'Disclosing information about an entity's climate-related transition, including information about transition plans, in accordance with AASB S2' (Educational Material) to assist entities applying sustainability reporting standard AASB S2 Climate-related Disclosures. The educational material explains the relevant disclosure requirements related to an entity's approach to respond to climate-related risks and opportunities, including information about the entity's transition plan (if it has one). The Educational Material builds on existing Transition Plan Taskforce (TPT) materials which were created by the UK Government to develop a framework for transition plan disclosures. 

The Educational Material sets out how disclosure regarding transition planning aligns with requirements under the Governance, Strategy and Metrics and Targets pillars in the AASB S2 standards and provides detailed examples to demonstrate how an entity might apply these requirements. The Educational Material reiterates that the AASB S2 standards do not require an entity to disclose its formal transition plan. Rather, an entity is required to provide information about its strategy in relation to its transition plan if it has one and may choose to cross-reference to it if it is publicly available to provide all transition-related information to primary users in one place. However, if an entity does not have a formal transition plan, it should disclose information about how it will implement any strategic goals, including mitigation and adaptation efforts in response to climate-related risks and opportunities. The entity may also disclose any anticipated changes to its business model as they relate to pursuing those strategic goals.

The Australian Government has also released voluntary Climate-related Transition Planning Guidance to help organisations plan for the impacts of the net zero transition and changing climate on their operations. The guidance is a key priority under the Sustainable Finance Roadmap, and aims to support organisations undertake transition planning to help with organisational risk management and build long-term business resilience.

NSW is unlikely to meet emissions reductions targets due to coal mine and data centre expansion

The NSW Net Zero Commission (the Commission) is the body established under the state's Climate Change (Net Zero Future) Act 2023 (NSW) (the Act) to provide expert advice and recommendations on NSW's approach to addressing climate change. Under the Act, the NSW Government has committed to a 50% reduction from 2005 emissions by 2030 and 70% reduction by 2035. 

The Commission's 2026 Annual Progress Report concluded that NSW is unlikely to meet its legislated 2030 and 2035 targets, due to the slow rate of emissions reduction in the state and a spike in emissions in recent years. To meet its targets, NSW must now reduce emissions at approximately 2.5 times its historical annual rate. Of the recommendations made by the Commission, the following areas of improvement were particularly notable: 

1. Accelerating renewable energy projects and the uptake of electric alternatives: Coal generated 97% of NSW electricity-sector emissions in 2022–23, with the Eraring power station accounting for 27% of those emissions. The Eraring power station closure has been delayed twice; first from 2025 to 2027, and then again to April 2029. Whilst clean energy attracted the largest share of private capital investment in NSW in 2024–25, the development of new generation and transmission remains significantly behind schedule. The Commission recommends that the NSW Government reduce planning, financing, and construction barriers for renewable energy projects, and treat their prioritisation as a whole-of-government imperative.
2. Coal mine extensions and approvals: Methane accounts for approximately 30% of NSW's total emissions, with coal mining responsible for a third of that figure. However, the NSW Government's policy position on coal mining permits mine extensions and expansions to continue. The Commission found that continued extensions "are not consistent with the emissions reduction targets in the Climate Change Act or the Paris Agreement," and recommends that the NSW Government meaningfully consider emission reduction targets in all planning decisions relating to coal mine extensions.
3. Data centres: AEMO forecasts that by 2035, data centres will add an additional 8 TWh to annual electricity demand, equivalent to approximately 13% of current NSW demand. The Commission recommends that the NSW Government acts to accelerate the electricity sector transition to ensure that the additional demand created by data centres does not further postpone coal mine closures. The Commission recommends that data centres are required to fund new renewable energy generation commensurate with their demand and again calls on the Government to consider its emissions reductions targets when assessing data centre planning applications.

The NSW Minister for Climate Change and Energy, Penny Sharpe, says that the government is committed to meeting its legislated reduction targets and is carefully considering the recommendations made by the Commission.

Release of draft ASX Corporate Governance Principles and Recommendations (5th edition)

On 21 July 2026, the Advisory Group on Corporate Governance (Advisory Group) released the draft 5th edition of the ASX Corporate Governance Principles and Recommendations (5th edition). 
 

Our impression of the consultation draft is that it helpfully simplifies some aspects of the existing regime, including to remove duplication with the law, but largely maintains the status quo in line with existing practices. The draft retains the same 8 broad Principles and the 'if not, why not' reporting approach, whilst introducing new and more specific disclosure requirements in certain areas. The Advisory Group intends to make a recommendation to the ASX Limited Board on the final changes by the end of 2026, with the 5th edition to take effect in respect of financial years commencing on or after 1 July 2027.
 

For more information on the 5th edition, see our Insights article here.

AI Wearables in the Workplace: What employers need to know

AI wearables, including AI smart glasses, are becoming increasingly prevalent in the workplace, with both employers and employees beginning to adopt the technology across a range of industries and settings.

Unlike earlier wearable devices such as fitness trackers, the current generation of AI smart glasses, including Meta's Ray-Ban line and enterprise products from manufacturers such as Vuzix, can record video and audio, display augmented reality overlays, and in some third-party applications perform real-time facial recognition. The global smart glasses market was valued at approximately US$2.46 billion in 2025 and is projected to grow at around 24% per year through to 2033, with the industrial sector the largest adopter category.

Employers across logistics, healthcare, and field operations are already deploying these devices. DHL's use of smart glasses in warehousing reportedly yielded a 25% increase in order-picking efficiency, whilst surgeons in the United Kingdom have used them to provide remote intraoperative guidance across hospital sites. At the same time, employees may bring personally owned devices to work without disclosure, a significant governance challenge given that consumer-grade AI smart glasses are visually indistinguishable from ordinary eyewear.

Australia currently has no legislation directly targeting AI wearables in the workplace. Instead, a patchwork of existing frameworks apply, spanning state-based surveillance legislation, work health and safety laws, privacy law, employment law, discrimination law, and intellectual property principles. Most notably, New South Wales passed the Work Health and Safety Amendment (Digital Work Systems) Bill 2025 in February 2026, which requires employers to manage psychosocial risks arising from digital monitoring. Internationally, no jurisdiction has enacted specific workplace legislation on this issue, though Canada has released a policy update restricting AI smart glasses in sensitive government zones.

Employers face a broad range of risks in this space, including breaches of surveillance law, work health and safety laws, unfair dismissal exposure, vicarious liability for covert employee recording, privacy non-compliance, data security vulnerabilities, inadvertent waiver of legal professional privilege, and discrimination claims where assistive wearable use is not reasonably accommodated.

Given that purpose-built regulation is unlikely in the short term, employers should act proactively rather than waiting for an incident or specific legislation. Comprehensive AI wearables policies should address disclosure and consent obligations, designated no-recording zones, confidentiality and intellectual property protections, data security requirements, offboarding procedures, work health and safety risk assessments, reasonable adjustment processes for employees with disabilities, visitor and contractor management, staff training, and clear enforcement consequences. The technology is available now, and the time to put governance frameworks in place is before an incident occurs.

For a more detailed analysis, see our full briefing note here. 

Clean Energy Council's mandatory renewable energy proposal for new data centres

The Clean Energy Council (CEC) has put forward a plan that developers looking to build new data centres in the Northern Territory or elsewhere in Australia be required to power 100 per cent of their operations with renewable energy. 

The CEC, which represents Australia’s leading renewables developers, has proposed that new data centres entering into power purchase agreements (PPAs) with new clean energy projects would also be required to purchase large-scale generation certificates (LGCs) for any power required before those wind or solar projects are built. LGCs are awarded to renewable generators based on the volume of electricity they produce and have historically been used by retailers and large consumers to meet voluntary clean energy targets. Under the CEC proposal, such purchases would become mandatory for any power not covered by a long-term offtake agreement, though it would apply only to new data centres and new renewable energy projects, leaving existing arrangements untouched.

UK modern slavery reform proposal for mandatory criteria and penalties

The UK Government has proposed substantial changes to its modern slavery disclosure regime. These reforms, set out in the Immigration and Asylum Bill 2026, seek to increase corporate accountability through introduction of mandatory reporting requirements and introducing financial penalties for non-compliance. We outline the key changes below:

• First, the new law would mandate that a modern slavery statement must include disclosures on six topics: (1) the entity’s structure, operation and supply chains; (2) the steps taken to identify and mitigate the risk of modern slavery; (3) the entity’s modern slavery policies; (4) the entity’s modern slavery due diligence processes; (5) the entity’s training for staff; and (6) the effectiveness of the steps taken by the entity. Previously, reporting entities (companies with >GBP36mil annual turnover) were encouraged but not legally obliged to disclose these details.
• Second, reporting entities would be required to publish their modern slavery statement within six months of the end of the financial year. The statement will also need to include an attestation from the signing individual as to the accuracy of its contents, rather than a director simply signing the statement on behalf of the board.
• Third, the Bill would introduce financial penalties for companies which do not comply with any of their duties under the Modern Slavery Act, calculated based on the higher of GBP 1 million or 1% of the company’s total turnover (or the public authority’s budget, noting that the Bill intends to now bring public authorities into scope as reporting entities).

The UK’s planned reforms follow a number of other efforts around the world to significantly strengthen modern slavery laws, including the introduction of the EU Forced Labour Regulation, Australia’s proposed corporate criminal offence for failure to prevent modern slavery, and the enhanced tariffs imposed by the United States on countries without forced labour import bans. 

ALP's 50th National Conference: Key employment and industrial relations reform proposals

The ALP held its 50th National Conference in Adelaide from 23 to 25 July 2026, approximately one year into the Albanese Government's second term. Coinciding with the conference, the Government made a number of significant reform announcements, with the Draft National Platform serving as the primary vehicle for setting the direction of the ALP's policy and legislative agenda. The conference's major workplace relations announcement was the proposed Fair Work Court.

The Albanese Labor Government has announced it will create a new federal Fair Work Court, described as "a specialist forum for resolving workplace relations disputes that works seamlessly with the Fair Work Commission," staffed by "specialist judges with workplace relations expertise" to provide "simpler, fairer and faster justice for working Australians." The Government will consult on the Court's design in 2026, including how it will interact with the FWC and improve access to justice, with workers, employers and legal experts able to provide feedback before the Government considers the Court's final design and next steps.

Beyond the new Court, the Platform states that the ALP believes "working people should be meaningfully consulted when there is workplace change that affects jobs and work, such as the decision to adopt AI and automate," and that "significant and consequential decisions, including those that affect workers, should be able to be reviewed and explained by a human decision-maker." The ALP will consider whether existing frameworks adequately protect workers from "intrusive surveillance," ensure privacy, and address the use of "personal or biometric data to train AI systems."

Other proposals signalled in the Platform include:

• a Secure Australian Jobs Code requiring entities tendering for Commonwealth contracts to complete a certification process demonstrating compliance with Fair Work and WHS laws, freedom of association, reduction of insecure work, a "commitment to direct employment," and targets and strategies relating to First Nations participation, gender equality and apprenticeships;
• the Government's commitment to 26 weeks of government paid parental leave with superannuation by 2026, with a longer-term goal of at least 26 weeks parental leave at full pay through a combination of government and employer contributions, and an ongoing focus on shared parenting and women's economic participation; 
• a pathway to increasing the Superannuation Guarantee to 15%, having achieved the 12% milestone, with the ALP confirming its commitment to ensuring all workers, regardless of how they are engaged, can accumulate superannuation on every dollar earned though no specific timetable has been announced;
• changes to lockout laws to allow workers and their unions to apply to the FWC to suspend disproportionate industrial action by employers, targeting extended lockouts that are disproportionate to the industrial action taken by employees;
• legislation to limit the participation of sham unions under the Fair Work Act, including their capacity to act as bargaining representatives;
• a national minimum standard for long service leave to form part of the National Employment Standards, working with state and territory governments; and

• strengthening the enterprise bargaining framework by "removing barriers to re-initiate single-interest bargaining and reduce administrative burden."

   

Australian Government consulting on changes to improve the efficiency of the sustainability reporting framework

The Australian government has released a consultation paper on changes to Australia’s climate-related financial disclosure regime, with submissions due 2 October 2026. The paper is aimed at improving the efficiency of the reporting framework while maintaining its core objectives, including international alignment with IFRS S2.

The main proposals include:

1. Adjusting assurance settings: Treasury is consulting on whether the current transition from limited assurance to reasonable assurance by 2030 remains appropriate. Options include maintaining limited assurance indefinitely, delaying the transition to reasonable assurance until 2035, or adopting a tiered model under which only more mature metrics (such as Scope 1 and Scope 2 emissions) would be subject to reasonable assurance.
2. Improving consistency in the application of existing requirements: Treasury is consulting on whether further guidance could help reporting entities apply concepts such as ‘reasonable and supportable information … without undue cost or effort’ and ‘commensurate with the skills, capabilities and resources that are available to the entity’, as well as support entities assessing whether they have material climate-related risks and opportunities.
3. Setting clearer boundaries on value-chain information requests: Treasury is consulting on measures to improve the consistency and predictability of value-chain information requests as entities prepare for Scope 3 reporting. Options include additional guidance on what constitutes a reasonable request for information from a reporting entity’s value chain and improving availability of publicly accessible domestic emissions factors.

Importantly, the paper emphasises that the consultation is not intended to revisit the core features of the sustainability reporting regime, including mandatory Scope 3 reporting or the entities captured by the framework. The paper also indicates that any reforms arising from the consultation would not affect reporting obligations for the 2026-27 financial year and would be implemented with a view to minimising disruption for reporting entities that have already invested in compliance systems and processes.

For clients with a presence in the United Kingdom, South African Development Community or Asia, we also publish trackers of ESG publications and developments for these regions at ESG Notes.

ESG thought leadership

To read more of our ESG thought leadership, please see:

• The Third Wheel Podcast Series: ESG in Australia
• ESG Notes and Climate Change Notes,
• ESG, Sustainability and Responsible Business offering
• Unlocking ESG Investment in Australia