A roadmap to understanding and complying with Australia’s new climate disclosure norms

As of January 2025, many large Australian corporations are required to publish annual sustainability reports that disclose climate-related financial information. The new climate disclosure requirements are aimed at providing investors with more transparent and comparable data about an entity’s exposure to climate-related financial risks. But what does this really mean for corporates operating in Australia?

We spoke with Annemarie Büttner, Swiss Re Corporate Solutions' Lead Climate Risk Solutions, and Alison Kelly, a Customer Manager in our Sydney office. Learn more about the steps clients can take to prepare for the change, and how Swiss Re Corporate Solutions can help them navigate this new regulatory landscape.

Alison: Climate-related financial disclosures are mandatory reports that many large entities and financial institutions in Australia will now have to prepare and disclose annually. They contain detailed information about climate-related risks and opportunities with financial implications for the business. The requirement to report was implemented starting 1 January 2025, with a phased rollout.

Alison: They include listed and unlisted companies, financial institutions, registrable superannuation entities, and registered investment schemes. The first group to begin reporting are generally any company with annual revenues of over A$500 million. Over the next two years this threshold will be progressively lowered, to cover more entities.

Alison: From the first year of reporting, businesses must disclose information relating to climate governance, strategy, risk management, and metrics and targets, including Scope 1 and Scope 2 greenhouse gas emissions. Disclosures on Scope 3 emissions, which occur up or down their supply chain, and emissions associated with financing or investment activities, will be required from the second year of reporting.

Entities should report the likely impacts of at least two possible future scenarios as prescribed by the requirements, one of which must align with the most ambitious global temperature goal in the Climate Change Act, which is limiting global warming to a 1.5 degree increase in temperature above pre-industrial levels.

Alison: Many companies may not have the capabilities or access to data required to assess their business operations against the climate criteria. Lack of understanding of what is required, and of how to accurately measure potential climate impacts, can present considerable difficulties. Companies face a multitude of risks with varying degrees of complexity, from physical risks, such as more frequent and intense weather events, to transition risks, like rising operational costs.

Companies will now have to carefully document and analyse the impact of these risks to their business before reporting them, which requires extensive data, analysis, and resources. This is especially true because organisations not only need to have accurate data on hand to gain a granular understanding of the threats they face; they must also disclose how they are pursuing their net-zero targets. Existing civil and criminal liability frameworks will apply to the report.

Annemarie: We can provide detailed insights into the climate risks our clients face with the help of our extensive experience in analytics and risk modelling, which is informed by the wealth of data that we have at our fingertips. Our Risk Data & Services platform (RDS), for instance, provides crucial data on climate-related hazards – both chronic and acute – helping companies to run various risk scenarios to better understand how their assets could be impacted by climate change.

Alison: Our clients can also rely on our in-house expertise, built over three decades. Our global Corporate Solutions team includes five climate scientists and 180 risk engineers, ensuring we always have the latest insights, data, and tools to work with. We assess our own climate exposure using also the data and solutions that we make available to our clients.  

Alison: The RDS platform allows corporates to better understand and manage their exposure to climate, supply chain, and property risks by offering access to data and know-how that was previously only available to risk experts.

One innovative way in which the platform does this is by allowing our risk managers and clients to create digital twins of relevant aspects of their businesses, which can then be stress-tested against climate events such as storms and earthquakes. This provides our clients immediate and in-depth insights of their potential exposure to such risks, as well as actionable insights on the effective means to possibly manage and mitigate them.

The platform’s climate solution also offers a toolkit to help clients enhance protection of their assets and insights for their climate-related risk reporting capabilities. Other parts of the platform may provide clients with greater visibility into their supply chains to uncover hidden risks and prepare for future disruptions, and to reduce and control risks across their global property portfolios.

Annemarie: In addition to providing the relevant data needed to inform the process of physical climate risk assessment, RDS can be also used for example, by portfolio managers to identify high-risk locations.

Annemarie: RDS was designed with client experience as a priority. Reports for a single location or an entire portfolio can be generated with just a few clicks. The platform is quick and easy to use, reducing reliance on external consultants. The benefits provided by RDS to our clients across a number of industries – including defence, construction, telecom, and energy – are evident in their feedback.

Clients have spoken of the platform’s ability to aid their reporting process by anticipating potential risks across the full range of climate-related challenges, and measuring risks throughout different locations. One client told us how RDS helped them identify and quantify the financial impact of acute and chronic physical climate risks at a site level and along supply chains spread across 62 sites in 31 countries.

For many of our clients, getting the data required for their climate-related disclosures is just a starting point. Once high-risk locations are identified, our global team of risk engineers can support them further by advising on the optimal next steps to manage those risks and strengthen their overall resilience.

Most importantly, our clients have highlighted that the RDS platform doesn’t just help them find and address risk. It also has the potential to create value, by empowering organisations to gather and integrate data from across their operations, and to leverage that data for meaningful analysis and modelling. That’s helped some clients challenge their existing perceptions and improve processes, ultimately supporting their growth.

^{*The risk map provided herein is intended solely for illustrative purposes and does not claim to be comprehensive or exhaustive. It is an example and shall not be relied upon for any risk assessment or decision-making processes. Swiss Re makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the information contained in the risk map. The risk map is protected by copyright and cannot be shared or used in any manner without Swiss Re's approval.}