Businesses should be preparing for mandatory climate disclosures that will increase from next year under federal law changes, an Xceedance webinar heard.

“The world is changing in disclosures in a very big way over the next few years, and companies are going to have to think about not just accounting for their financial outcomes, but also their climate outcomes,” Finity Consulting principal climate analytics Sharanjit Paddam told the event. 

The disclosure standards extend across governance, strategy, risk management and metrics, and targets.

“You not only have to disclose the financial impacts on your balance sheet today and your income statement today, but also in the short-, medium- and long-term future,” Mr Paddam said.

The corporate and prudential regulators want hard numbers in accounts showing how climate change will financially affect operations, he says.

The requirements affect large companies with a December 31 2025 year end, before applying more widely to businesses over a certain size.

Some larger underwriting agencies and brokers will be affected.

Xceedance business leader for key accounts in Australia and New Zealand Prateek Vijayvergia said while 75% of ASX 200 companies are committed to or already performing climate reporting, the number falls to 10.5% for broader listed companies.

“There’s a lot more awareness and commitment and urgency that we see in the Australian market now and this is not limited only to the insurance business, but for all larger ... businesses,” he said. 

Nevertheless, gaps remain in climate-related reporting among listed entities and in reporting depth and quantification, he says.

Scope 3 emissions indirectly generated by a company’s activities will be the largest source reported, and the most challenging due to a lack of data, methodology and resourcing.

“What’s really helping all of us is the advancement in technology so there are better ways of collecting information and data around emissions,” Mr Vijayvergia said.