The Business Council of Australia welcomes the opportunity to comment on The Treasury’s Improving the efficiency of climate related financial disclosures – Consultation paper.
The BCA is ambitious for Australia. We aspire to drive prosperity for all Australians, leveraging our collective expertise and influence to shape a bright and innovative future for businesses, industries and communities. We are committed to working towards an Australia that is globally competitive, productive and fair.
Productivity is the primary factor which will define Australians’ future quality of life. Simply put, there are ‘no free lunches’ and we must be able to produce more with what we have if we are to sustain growing wages and national prosperity. If businesses cannot run efficiently and invest with confidence to strengthen their operations, the cost of what they are producing is higher than necessary. If the opposite is true, however, higher wages can be afforded without fuelling inflated prices.
Australian productivity has not meaningfully improved in a decade and today, our productivity growth languishes well behind most comparable nations — including the United States, United Kingdom, Germany, and France. Other nations are winning the business investment that can make our efforts more productive, in new technologies and capabilities.
We note that the cost to Australian business and the economy of complying with federal regulation (alone) was estimated to be around $160 billion or nearly 6 per cent of GDP in 2025, up from $65 billion or 4.2 per cent of GDP in 2013.[1] Treasury estimated the compliance costs for climate related financial disclosures could average around $1 million to $1.3 million a year per reporting entity.[2]
Our members support continuous improvement in the quality of climate related financial disclosures to facilitate investment decision making that has due regard for climate related risks and opportunities. Our members also support continuous improvement in the efficiency and effectiveness of regulation underpinning Australia’s sustainability reporting framework.
The BCA strongly supports the Treasury’s principles underpinning proposed reforms.
- Improve the efficiency of the sustainability reporting framework by reducing compliance costs.
- Maintain international alignment between AASB S2 and its global counterpart, IFRS S2.
- Minimise disruption for reporting entities.
- Ensure the 2028-29 Review is used to examine more systemic issues.
The BCA offers the following comments on The Treasury’s three specific proposals for reform.
Proposal 1: Adjusting assurance settings
The BCA recommends requiring limited assurance on an ongoing basis and therefore removing the requirement to transition to reasonable assurance.
- Limited assurance would provide a core safeguard by requiring independent review of climate related financial disclosures while recognising the practical challenges associated with assuring climate-related information.
- Maintaining this safeguard will encourage reporting entities to maintain effective internal records and provide investors with confidence that the disclosed climate risks and emissions have been professionally reviewed.
- This would align Australia with other jurisdictions as few, if any, jurisdictions plan to currently progress toward a reasonable assurance standard for sustainability reporting.
- In practice, some entities may choose to obtain voluntary, higher level assurance signoffs for their sustainability reports to meet other market access demands, supply chain requirements, and provide greater confidence in the relevance and reliability of information reported.
Proposal 2: Improving consistency in the application of existing requirements
The BCA recommends the provision of additional guidance within the regulatory framework (by the regulator and standard setters) to assist implementation of the sustainability framework.
All guidance should be jointly endorsed by ASIC, the AASB and the AUASB, and clarify how existing requirements apply, including proportionality, materiality, and the treatment of estimates and uncertainty.
Sustainability reporting is a new regime in Australia and entities are facing uncertainty in practice when applying certain aspects of the disclosure and assurance standards, and legislation. Individual BCA members’ submissions to this consultation will provide detailed responses on specific areas where additional guidance may assist implementation of the sustainability reporting framework. All guidance
Proposal 3: Setting clearer boundaries on value chain information requests
The BCA recommends reducing supply chain administrative burdens through improving publicly accessible emissions factors as a reliable source of secondary data to be used voluntarily.
- By providing reliable secondary data, the government can reduce the need for reporting entities to issue complex data requests to resource constrained small to medium enterprises, which often lack the technical capacity to calculate granular scope 1 and 2 outputs.
- Implementing a credible centralised repository of emissions factors for voluntary use would help to ensure that large reporting entities can reliably estimate their scope 3 emissions across a range of industries, without imposing an unreasonable cost burden on their value chain partners.
- This approach would increase the availability of inputs that reporting entities can rely on to calculate emissions and improve the reliability and comparability of outputs for users of this information.
- It should not be applied in a way that precludes industry innovation to trace more granular data to provide more detailed information to calculate emissions, as supply chain transparency can be used as a competitive advantage.
- Increasing the availability and market awareness of publicly accessible and comprehensive emissions data would lower compliance costs for reporting entities that operate in difficult to trace industries, recognising that some sectors have more variability than others.
- Publicly accessible emissions factors should include robust existing emissions factors that complement rather than replace higher quality primary data — and reporting entities should be able to continue to rely on international data sources with regard to overseas manufacturing and supply chains.
[1] Mandala, $160 billion and counting: The cost of Commonwealth regulatory complexity, November 2025, Report prepared for the Australian Institute of Company Directors.
[2] https://oia.pmc.gov.au/published-impact-analyses-and-reports/climate-risk-disclosure