On 11 April, Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia jointly responded to the Senate Economics Legislation Committee in relation to Schedule 4 – Sustainability Reporting of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (“Schedule 4”).

The joint submission expressed concerns in relation to significant onerous and costly requirements for Group 3 entities. Reporting entities that disclose (in their sustainability report) that there are no material climate-related risks or opportunities for a reporting period will need to have this disclosure audited. The audit of this disclosure (of no material climate-related risks or opportunities) will involve additional costs likely to range between $20,000 to $50,000 for group 3 entities.

Further significant impacts relating to capacity, pressure on SMP auditors and audit quality were also highlighted in the joint submission as well as two solution options for committee consideration:

1. Increasing the threshold for Group 3 entities to $100 million consolidated revenue and providing for an additional qualifier that would limit this group to entities that are Public Interest Entities* or alternatively, Disclosing Entities. OR
2. Removal, or limitation to Public Interest Entities or Disclosing Entities, of the audit requirement when there are no material climate risks or opportunities.

_{*As defined in APES 110 Code of Ethics for Professional Accountants (including Independence Standards).}