Climate-related financial disclosures
What you need to know
Australia's mandatory climate-related financial disclosure regime is now embedded in the Corporations Act 2001 (Cth). For Japanese groups with Australian subsidiaries, including diversified trading houses, financial investors, resources participants and infrastructure owners, the key point is that climate reporting is no longer a voluntary ESG exercise. It is becoming part of the Australian annual reporting framework, with board-level declarations, external assurance and potential regulatory and litigation consequences.
The regime applies to certain entities that lodge financial reports under Chapter 2M of the Corporations Act, meet prescribed size thresholds and/or have reporting obligations under the National Greenhouse and Energy Reporting scheme. It requires those entities to prepare annual sustainability reports, including climate statements, in accordance with Australian Sustainability Reporting Standards issued by the Australian Accounting Standards Board. The policy direction is aligned with the global baseline developed by the International Sustainability Standards Board, but the Australian standards include local modifications and are focused on climate-related financial disclosure. Australia is the first country to be issuing sustainability reports under this standard and other countries, including Japan, will also shortly be disclosing under these standards.
Climate litigation
What you need to know
- In a landmark case, the Federal Court has found that the Commonwealth Government does not owe a duty of care to people of the Torres Strait Islands to protect them from the impacts of climate change
- This decision, along with the Full Federal Court's earlier judgment in the Sharma case, presents a significant obstacle for future novel climate change duty of care cases in Australia against both governments and companies.
- Despite this outcome, we are likely to see further significant climate change litigation in Australia, including cases based on alleged greenwashing, directors' disclosure duties, administrative law, contract claims, human rights, and other legal grounds.
- Communities seeking redress for alleged climate-related harms from government policy may be more likely to pursue legislative change or public advocacy rather than negligence claims.
Modern slavery
What you need to know
The Australian Anti-Slavery Commissioner has signaled that a shift from voluntary reporting to mandatory due diligence obligations under the Modern Slavery Act 2018 (Cth) is expected in the very near future, potentially within the next year or two. Alongside this, the ACCC has released updated guidance on sustainability collaborations, incorporating eight new modern slavery case studies developed jointly with the Anti-Slavery Commissioner's office, which confirms that businesses can cooperate with competitors and industry peers on modern slavery responses without attracting anti-competitive concerns. Regulatory compliance expectations are tightening more broadly: the ATO and the Attorney-General's Department are now better positioned to identify non-reporting entities, and a "wake-up call" is anticipated for businesses that have not complied with even the basic reporting requirements of the Modern Slavery Act. International market access is also increasingly contingent on meeting due diligence standards, with European regulatory requirements set to affect Australian exporters within the next couple of years.
Traditional owners and enhancing social performance
Open the pdf to read a bite-size version of Ashurst Perkins Coie's annual review of native title legal developments in 2024-2025. We cover what you need to know about each issue in our 10th annual Native Title Year in Review.
Nearing Net Zero podcast
The pressure on businesses to decarbonise is growing and will continue to intensify as security, affordability and sustainability of energy systems become key issues. The energy market of the future, including energy infrastructure and generation, will look vastly different from what it looks like today, presenting compelling opportunities and complex challenges for industry to navigate. Nearing Net Zero podcast
Authors: Elena Lambros, Partner; Miriam Kleiner, Partner; Andrew Gay, Partner; Natsuko Ogawa, Partner; James Clarke, Partner; Kate Wilson, Partner; Tony Hill, Co-Practice Head and Trent Donovan-Wallace, Executive.
