Australian House of Representatives Advances Climate Reporting and Financial Market Reforms with Key Legislation

Australia's House of Representatives has recently passed the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, marking a pivotal step in both climate and financial market reforms. This significant piece of legislation introduces mandatory climate-related financial reporting for large and medium-sized companies and establishes the Net Zero Economy Authority to steer Australia towards its climate goals.

The new law mandates that, starting in January 2025, large companies will be required to disclose detailed information about climate-related risks, opportunities, and their greenhouse gas emissions across the entire value chain. This requirement will initially apply to public companies and large proprietary entities meeting specific size thresholds, such as those with over 500 employees or revenues exceeding $500 million. Medium-sized companies will begin reporting in July 2026, with smaller companies expected to follow a year later. Notably, the legislation includes a phased approach for Scope 3 reporting, giving companies an additional year to disclose indirect value chain emissions and offering a three-year protection period from litigation related to these disclosures.

In addition to climate-related reporting, the bill also addresses reforms in financial market infrastructure. It amends the Corporations Act 2001 and other relevant Acts to enhance Australia's financial market stability. The legislation introduces a crisis management and resolution regime for domestic clearing and settlement facilities, while expanding the licensing, supervisory, and enforcement powers of the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA). These changes aim to strengthen the resilience of Australia’s financial markets.

A key aspect of the bill is the establishment of the Net Zero Economy Authority. This new body is tasked with guiding the country’s transition to a net-zero emissions economy. It will focus on reskilling workers for the energy transition, facilitating industry and investor engagement with net-zero opportunities, and supporting communities in attracting new clean energy industries.

The legislative process for the bill was extensive. It was first introduced in the House of Representatives on March 27, 2024, and underwent several readings and debates before passing on September 9, 2024. The Senate reviewed and approved the bill after a series of discussions and amendments, culminating in its final approval on August 22, 2024.

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