Foundations of Climate Disclosure

Purpose of Commonwealth Climate Disclosure

The Commonwealth Climate Disclosure (CCD) initiative improves transparency and accountability in how Commonwealth entities and companies manage climate-related risks and opportunities.

The CCD initiative aims to:

support long-term resilience of public services and assets
improve transparency, accountability and credibility in how Commonwealth entities and companies identify and manage climate risks
support competitive neutrality between the Commonwealth public sector and large businesses and financial institutions that have sustainability reporting obligations under the Corporations Act 2001
support delivery of Australia’s emissions reduction targets under the Paris Agreement and the APS Net Zero 2030 Target.

International and national policy alignment

Climate disclosure recognises the increasing impact of climate risk on the financial system.

International standards

The Task Force on Climate-related Financial Disclosures (TCFD) developed a principles-based approach to help organisations disclose climate-related risks and opportunities.

The International Sustainability Standards Board adopted the TCFD principles and incorporated them into IFRS S2 Climate-related Disclosures. IFRS S2 provides a comprehensive and detailed international standard for climate-related disclosure requirements.

Australian standards

Australia has adapted IFRS S2 into the Australian Sustainability Reporting Standard AASB S2. AASB S2 forms the basis for climate-related financial disclosure requirements in Australia. The AASB S2 were adapted to suit the Commonwealth legislative and regulatory environment and policy settings, including the Net Zero in Government Operations Strategy.

Competitive neutrality

The CCD Requirements align closely with the Australian Sustainability Reporting Standards AASB S2 Climate-related Disclosures. This alignment supports competitive neutrality between the Commonwealth public sector and large businesses.

The CCD Requirements adapt AASB S2 to Commonwealth legislative, regulatory and policy settings, including the Net Zero in Government Operations Strategy. They focus only on climate-related information and do not cover broader sustainability topics. The Requirements comparability with AASB S2 supports fair competition and efficient outcomes in markets where the Government operates.

Both AASB S2 and the CCD Requirements include General and Core Requirements. The General Requirements provide guidance on when and how entities should apply the Core Requirements. Further detail is available in Preparing a Climate Disclosure for the CCD General requirements. The Core Requirements provide the specific criteria entities are to address and are structured around the 4 pillars. An overview is available in What Needs to be Reported.

Pillars of climate disclosure

The 4 foundational climate disclosure pillars provide a clear and structured framework for identifying, assessing, reporting climate-related risks and opportunities:

Governance: How entities oversee climate-related risks and opportunities
Strategy: How entities plan long-term and build resilience to climate change
Risk management: How entities identify, asses and mitigating climate risks
Metrics and targets: How entities use data and targets to measure and track climate progress, including scenario analysis and greenhouse gas emissions.

Environment Protection and Biodiversity Conservation Act 1999

Under section 516A of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), Commonwealth entities and Commonwealth companies are required to disclose certain information relating to Ecologically Sustainable Development in their Annual Reports. The Environment Protection Reform Act 2025 amends section 516A of the EPBC Act to clarify climate risk reporting obligations (i.e. Commonwealth Climate Disclosure) as part of the broader environmental reporting by Commonwealth entities and Commonwealth companies in their annual reports.

Reporting on climate matters under section 516A(6) will be mandatory upon the commencement of these relevant provisions in the Environment Protection Reform Act 2025, which may include a determination for requiring information as stated in CCD policy to be included within reports under section 516A(6)(c) or (d). This determination would need to be made by the Minister responsible for the EPBC Act, or a delegate under 515(1B) once those provisions commence.

Changes are available at items 577 - 582 of the Environment Protection Reform Act 2025 – Parliament of Australia. The Environment Protection Reform Act 2025 will commence either 12 months from Assent (1 December 2026) or earlier by Proclamation.

Scope of the CCD Initiative

The CCD initiative focuses only on climate-related information. It does not cover broader sustainability topics. 

Further detail on the requirements for each of these pillars is available in Climate Disclosure Requirements and What Needs to Be Disclosed.