CA ANZ and CPA Australia have provided feedback to Treasury on the design of climate-related financial disclosures in Australia. The main points from our 15 page submission are outlined below: 

• We continue to believe that sustainability reporting will in the future achieve equivalent standing with financial reporting, reflecting increasing demand from investors and stakeholders for such sustainability-related information. It is critical that the foundations of climate-related financial disclosures, as proposed in this consultation paper, are aligned to existing legislation and reporting requirements while considering the balance between the practical costs and benefits in determining the appropriate population of reporting entities
• The Australian Accounting Standards Board (AASB) and Australian Auditing and Assurance Standards Board (AUASB) will be pivotal in developing reporting and assurance standards respectively for climate-related financial disclosures in Australia, and it is important that they are adequately funded and properly resourced in this key piece of work. 
• Legislation for climate-related financial disclosures should be drafted the same way as it is for financial reporting which enables the AASB and AUASB to determine the appropriate framework and applicable requirements for reporting and assurance of climate-related financial disclosures. 
• Climate risk is just one of a range of sustainability risks which may impact an entity. Therefore, we consider climate-related financial disclosures to be the starting point for wider sustainability-related financial disclosure requirements for business. Legislation will need to include sufficient flexibility to enable future sustainability-related disclosures to be captured under the one overarching reporting framework, to avoid fragmentation and excessive reporting burden for entities. 
• We recognise that Treasury and the AASB are working in parallel on an accelerated timeline to meet the first reporting period proposed to commence on 1 July 2024. The AASB is expected to consult on detailed climate-related disclosure standards in the second half of 2023, which may occur before legislation is released. It will be challenging for us, and our members, to respond appropriately without knowing the legislative context in which these disclosures will sit. 
• We are concerned that the current reporting threshold for Group 3, which aligns with that for financial reporting by large proprietary companies, is too low for the purposes of climate-related disclosures and assurance. To balance the regulatory burden and complexity for business against decision useful information, we propose that the threshold for Group 3 is re-evaluated and modified to align with other similar existing reporting thresholds, being consolidated revenue of A$100 million for unlisted entities and include all listed entities regardless of size.
• We recommend that the proposed transitional arrangements for disclosure and the modified liability approach are made available to all entities reporting under the regime. The current proposed ‘end state’ occurs before entities in Group 3 have prepared their first report and yet we consider Group 3 entities would benefit most from such arrangements.
• The scope and level of assurance provided over climate-related disclosures should be proportionate to the size and risk of the reporting entity. At present, we consider there is insufficient information to indicate that the benefit to users from reasonable assurance over all climate-related disclosures for smaller and less risky entities would exceed the costs of such assurance.
• It will be important for Government to take a leading role in building and improving knowledge in climate-related risks within reporting entities to help support effective and genuine decision useful climate-related information.