Preparing a climate disclosure

Scope 

Which entities must comply with the CCD reporting requirements?

• Government bodies not subject to annual reporting requirements under PGPA Act
• Stream 1 Commonwealth companies that report under section 292A of the Corporations Act
• Stream 2 Tranche 3 Commonwealth entities and companies subject to the carve‑out. 

Entities that are exempt from reporting may still need to provide climate-related information to their parent entity. This information supports the preparation of an aggregated disclosure. Further information is available under Consolidated reporting below. 

Exemptions

Exemptions relate to disclosing information. They apply where disclosure could pose a risk to national security, an organisation or an individual. This includes:

• breach of secrecy laws
• exposing classified or commercially sensitive information
• damaging the effective operation of government. 

Entities’ overseas activities are exempt from climate reporting and emissions calculations but that entities may report voluntarily. 

Entities should note that their international operations may be subject to separate climate disclosure rules in other countries.

See more information in the Criminal Code Act 1995, Net Zero in Government Operations Strategy

Commencement of Disclosures

Entities will commence reporting on climate disclosure requirements in phased Tranches either in a 2 or 3 year rollout and must continue reporting every financial year after commencement, or as appropriate for the entity’s specific annual reporting period.

Entities that report on a calendar year should align their first climate disclosure with the timing of their annual report. 

See more information in the Commonwealth Climate Disclosure Policy

Voluntary participation

Entities are allowed to start disclosing climate-related information earlier than the commencement date for their assigned Tranche.

Progressive sequencing

Progressive sequencing helps entities build capability and resources on climate disclosure by allowing them to choose to report more information than required in any year. 

Disclosure obligations become more complex over time. Entities should prepare for later requirements, including scenario analysis, financial impacts, and where relevant, financed emissions.

Tranche 1 and 2 entities ultimately need to meet the full Year 3 Requirements. Tranche 3 entities are required to meet the Year 2 Simplified Requirements, unless they are subject to a carve‑out.

Location of Disclosures 

Information included by cross-reference

Entities may meet disclosures requirements by cross-referencing information within the annual report or in other publicly available documents. These documents must be accessible at the same time and on the same terms as the climate disclosure. 

Typical documents include the Emissions Reduction Plan and Climate Risk and Opportunity Management Action Plan.

When using cross-refencing, entities should: 

• clearly name the external document and explain exactly how to access it
• ensure that, when read alongside the annual report, the material fully covers all Core Requirements
• keep the climate disclosure clear, identifiable and easy to navigate, even when information is cross‑referenced rather than included directly.

Cross‑referenced material must collectively meet all climate reporting requirements and be easy for readers to understand.

Climate-related information that is already included in the main body of annual report and meets Requirements may be cross referenced within the disclosure and does not need to be repeated. For more information, please see Publishing a Disclosure.

Comparative information

Entities should include comparative data or narrative information from the previous year in their climate disclosure when it helps readers better understand the current year’s results. 

Comparative information supports transparency by showing trends over time, such as progress on emissions reduction targets.

Consolidated reporting

Unless otherwise agreed with the Department of Finance, entities should use the same reporting entity for climate disclosures as for their related financial statements.  

Entities that prepare consolidated financial statements may choose to report aggregated climate information for the parent and its subsidiaries, ensuring that the included subsidiaries are clearly identified.

Materiality

Entities should disclose climate‑related risks and opportunities that are material. Material risks or opportunities are those that significantly impact the entity, its ability to deliver public policy outcomes or its financial prospects. 

Materiality is the main filter for deciding what information to include in your climate disclosure.

Each entity must assess materiality as part of its existing risk‑assessment process. There are no set thresholds for materiality. Entities must apply informed judgement to decide what information is meaningful enough to report. 

Under the Public Governance, Performance and Accountability Rule 2014 (PGPA Rule), entities must consider the information needs of Parliament and other users when making material decisions.

Entities may use the following steps:

• identify all climate-related risks and opportunities
• assess which risks and opportunities are meaningful
• apply judgement, guided by the Materiality Guidance
• disclose only information that is material.

See more information in the Materiality Guidance, The Australian Government’s Approach to Climate Risk and Opportunity Management in the Public Sector 2024-2026

Connected information

Entities need to present climate disclosures in a way that helps users clearly understand how different pieces of information relate to each other. 

This means entities must:

• show how different climate‑related risks and opportunities are connected
• link information across the disclosure, including Governance, Strategy, Risk management, and Metrics and targets
• connect climate disclosure to the financial statements
• show how climate information aligns with the assumptions and data used in the financial statements.

Reasonable and supportive information

Entities should base their climate disclosures on all reasonable and supportable information available at the reporting date, without incurring undue cost or effort. 

Climate disclosures must use reliable information that the entity can reasonably access.  

While not needing to conduct an exhaustive or costly search, entities should consider and include information that would be relevant to users of the annual report users. 

Key factors that may influence judgement about what information to include are:

• resource limits, including systems, processes and funding
• data availability, including quality and completeness
• access to specialist skills or expertise.

For more information on the 3 components which are used as proportionality mechanisms: Proportionality mechanisms

Operational constraints

Commonwealth entities and companies operate under public service-specific governance constraints. These constraints may limit an entity’s ability to act on some climate-related risks and opportunities. 

Because of these constraints, entities should disclose: 

• where operational or governance constraints restrict action 
• outline any interim, partial or preparatory actions being taking, even where full implementation is not yet possible 
• acknowledge when meaningful progress depends on coordination with other Commonwealth entities or government decisionmakers.

Aggregation and disaggregation

Entities should present their climate disclosure at an appropriate level of detail. Information should not be overly aggregating nor including irrelevant detail, so that material information remains clear and easy for users to understand.

Errors

See Tabling Guidelines, for guidance on presenting documents to Parliament, including how to address errors identified after documents have been tabled. See the detailed explanation in the General Requirements of all CCD Requirements.

Financial effects

Financial effect requirements apply to Tranche 1 and 2 entities only. Tranche 3 entities are exempt from these requirements (S7-13). 

Climate‑related risks and opportunities can affect an entity’s financial position and performance. Entities are required to disclose financial effects from third year of reporting onwards. 

Complementary policies

See the related initiatives page.