Since the Treasury has released a proposal setting out the climate-related disclosure requirements, businesses have been scrambling.

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Under the proposal, companies will need to disclose climate-related information as part of their general financial reporting, starting as early as January 2025 for some companies.

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But having the right data in front of businesses can be an opportunity to reduce their energy costs with the right tools.

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Why are businesses required to report on carbon emissions?

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The Australian Government has committed to reduce greenhouse gas emissions by 43 per cent below 2005 levels by 2030 and achieve net zero emissions by 2050. Massive investments are needed across the economy to achieve these commitments.

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The information will be used for the market to mobilise and channel resources to the companies that are best managing and mitigating their climate impacts.

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What do the mandatory requirements mean for companies?

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The opportunity for businesses is to use their carbon reporting from their energy to make better decisions.

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There are tools where businesses not only track their energy usage and emissions, but can simulate energy upgrades that will massively reduce energy costs while reducing emissions.

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The companies that are first-movers will be able to build long-term value by focussing on efficiency improvements in all of their locations.

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Energy in particular is an opportunity for companies to reduce a major expense as they progress toward their emissions targets.

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With new technologies in the market, brick-and-mortar businesses may have a leg up. But it also means an exponential amount of decisions need to be made across the energy stack as these goals are reached.

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What are climate emission reporting requirements?

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Under Treasury’s proposal, companies will have to disclose their current and anticipated climate-related risks over the short, medium and long term.

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Disclosure requirements include:

• greenhouse gas emissions from all sources – scope 1 (direct emissions generated by operations), scope 2 (indirect emissions from energy purchased and used) and scope 3 (indirect emissions along the wider value-chain or in the franchise network)
• climate resilience of strategy and business models, informed by scenario analysis
• Responses to anticipated material climate-related physical and transition risks and opportunities
• Any climate-related targets, offset contributions and transition plans.Companies will also be required to obtain assurance by a third-party.

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Treasury is proposing a staged approach to implementation, starting with large businesses and financial institutions from the 2024/25 financial year and expanding to cover all other proposed groups by the 2027/28 financial year.

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Effective emissions reporting and climate reporting are crucial for businesses aiming to meet regulatory standards and enhance sustainability. By integrating robust energy management practices, companies can efficiently track and report their greenhouse gas emissions.

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What comes next?

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‍Mandatory climate-related disclosures is the first step to signal to the market who is focussing on reducing their impact and capturing this opportunity.

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The market until now has seen sustainability and climate action as something that will cost money. But there is a way to reduce energy costs while reducing emissions.

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To make the best decision on cost and emissions ROI you need a platform that consolidates the data to help you understand what needs to be done.

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Termina automatically keeps you on the lowest prices while giving you the tools to simulate ROI for energy upgrades so you can reduce costs while reducing emissions.

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The best part is there's no out of pocket costs. Get an obligation free savings estimate now.

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