Mandatory climate-related reporting has been introduced for large Australian companies, including those in the food and agriculture sectors, to improve transparency and encourage the management of climate-related risks.
A report by RaboResearch sustainability analyst Anna Drake shows that direct reporting requirements under the new climate-related financial disclosure (CRFD) regime are limited to large companies.
“According to the disclosure standard, entities over certain size thresholds are required to share information about climate-related risks and opportunities that could reasonably be expected to impact their cash flows, access to finance or cost of capital over the short, medium or long term,” said Drake.
The regime’s disclosure requirements are globally aligned and based on international standards, covering:
- Impacts of business on the climate.
- Impacts of climate change on business activities.
While the regime is unlikely to impact farmers in the short term, the report says farmers can expect greater supply chain engagement on climate.
“What happens at the farm level will likely be a key focus for food and agriculture companies that are subject to the regime as agricultural production is often a highly-material source of greenhouse gas emissions and climate risk within the food value chain,” she said.
Under the regime, reporting will become more widespread, with engagement strategies with suppliers further developing to source relevant data.
“Many companies covered by the requirements have already been voluntarily reporting around the core disclosure pillars,” Drake added.
“These strategies could include providing education, training and support to suppliers.
“They could involve requiring suppliers to set their own science-based emissions reduction targets and they could see the introduction of requirements to provide emissions data.”
The CRFD regime commenced on 1st January 2025.