The Australian government has mandated climate-related financial disclosures for large businesses from July 1 this year. This new legislative requirement means Group 1 businesses, that is those with $500M in revenue, 500 staff or $1B in assets need to report their scope 1 and 2 emissions this year, and their scope 3 emissions next year. That means if you provide goods and services to a Group 1 business, next year they will be asking you for your emissions to calculate their scope 3 emissions.
This is a game-changer for tourism businesses, especially SMEs, as you may need to provide the carbon footprint for your accommodation or experience. This legislation change speaks to a broader shift towards more sustainable business practices aimed at enhancing transparency and accountability across all levels of business. Group 2 businesses will start reporting in 2026 and Group 3 in 2027.
If you haven’t already had a look to see what your reporting requirements may be, now is the time. If you regularly provide services to Group 1 businesses, start thinking about measuring your carbon footprint.
Scope 1 emissions are ‘direct’ emissions such as the fuel you consume, Scope 2 is ‘indirect’ and includes electricity consumption you purchase from the grid and Scope 3 emissions are things such as staff travel, waste to landfill, etc and comprise about 80 to 90 per cent of most entities’ emissions. Therefore, all organisations, including small businesses, will need to reduce emissions through the value chain. And you can’t manage what you don’t measure, so all entities will need to measure their carbon footprint one way or another.
Mark Olsen
Chief Executive Officer