Beyond the Baseline: Making Sense of Emissions Reporting Requirements

As mandatory emissions reporting becomes a reality for Australian businesses, companies are facing new challenges in tracking, verifying, and disclosing their carbon footprint. To break it all down, Ruminati’s Customer Success Lead, Lily Rodgers, sits down with lawyer, Kristen Roy, to explore the key drivers behind these changes, how the new ASIC requirements will impact businesses, and what steps companies need to take to stay compliant.

They discuss everything from Australia’s national emissions reporting framework to the practicalities of Scope 3 reporting- arguably the biggest hurdle for companies, as it requires gathering emissions data from their supply chains. Kristen also explains the different levels of auditing and how Ruminati’s platform, particularly Ruminati VISION, is helping businesses streamline data collection, improve reporting accuracy, and meet these evolving requirements with confidence.

If you're wondering what these new rules mean for your business and how to prepare, this conversation is packed with valuable insights.

Lily: Hi Kristen, there’s a lot of talk about mandatory emissions reporting lately. Can you start by giving us a bit of background? How did we get here?

Kristen: Absolutely. Australia's approach to emissions reporting has largely been shaped by two major global agreements: the Kyoto Protocol, which kicked in back in 2005, and the Paris Agreement, signed in 2015. The Kyoto Protocol was the first big global push to cut emissions, but it only applied to developed countries. Then came the Paris Agreement, which changed the game. Instead of top-down targets, each country, including Australia, set its own emissions reduction commitments, known as Nationally Determined Contributions (NDCs). Australia now has to track its emissions, report on progress, and align policies with its climate commitments.

Lily: That makes sense. So how does Australia actually track and report emissions at the national level?

Kristen: It’s all logged in the National Greenhouse Accounts, which act like a central database of our emissions data. Every year, the government compiles this information into the National Inventory Report and submits it to the UNFCCC. The report details emissions by sector and region, giving a national snapshot of where we’re at.

Lily: And on the domestic side, what legislation is in place to support all of this?

Kristen: Well, there are three big ones. First, the National Greenhouse and Energy Reporting Act (NGER) from 2007, which requires large companies (mostly in high-emissions industries like mining) to report their emissions, energy use, and production. This act also includes the Safeguard Mechanism, which sets limits on big emitters. Then we’ve got the Climate Change Act 2022, which formally commits Australia to net zero by 2050. And, starting in January of this year (2025), amendments to the Corporations Act 2001 will require certain companies to submit an annual Sustainability Report to ASIC.

Lily: So it’s all getting a little close to home for everyone. In terms of the Sustainability Report you mentioned, can you give me a bit more detail on who exactly has to submit it and what kind of details they need to include

Kristen: From January 2025, Australian companies that meet at least two of the three criteria set out by the Corporations Act (over 500 employees, $1 billion or more in consolidated gross assets, and $500 million or more in consolidated annual revenue), will have to lodge an annual Sustainability Report with ASIC. This isn’t just a box-ticking exercise- it’s based on the Australian Sustainability Reporting Standards (ASRS), which outline what needs to be included.

A key component of the report is the Climate Statement, which discloses:
- Climate-related financial risks and opportunities for the company.
- Key metrics and targets related to climate change, including Scope 1, 2, and 3 emissions.
- Governance, strategy, and risk management processes around emissions reduction.

One important thing to note is that Australian subsidiaries of international parent companies can’t just submit their parent company’s ISSB-compliant report. They need a separate Australian-compliant Sustainability Report, unless ASIC grants an exemption.

Lily: That’s sounds like a big shift, but hopefully there are tools and guidance to help with this! How do platforms like Ruminati help businesses with these new requirements?

Kristen: Scope 3 reporting is going to be the biggest struggle for businesses here because it’s hard to collect data from all the way down the supply chain. And put simply, if you’re not using the right data then it’s hard to measure and show any progress, which is a key part of the reporting requirements.

Let me try and explain further: at the moment, there are two ways for a company to collect Scope 3 information:

1. National Averages: companies can estimate Scope 3 data by relying on emissions factors that are calculated based on industry averages or national data;

2. Real information (supplier based data): this involves collecting and analysing emissions data directly from suppliers.

The great disadvantage of using national averages is that unless the national emissions factor reduces, it will be really hard to track or show any year-on-year reductions in your supply chain. The only real way to report any reduction would be to just buy less- not an ideal solution.

Businesses should choose a platform that can collect and analyse emissions data directly from suppliers, allowing for more precise Scope 3 figures which will actually show a reduction if sustainable strategies are being implemented through their supply chain. Without this, a business might be trying to help supply chains effect change but not be able to measure or report on that.

Lily: Right! Ruminati VISION gives companies a streamlined way to access and analyse aggregated emissions data from their supply chain, which helps them set reduction targets and demonstrate progress over time. This is a key part of reporting requirements, and we’ve already heard from some of our partners that that’s a game-changer.

So do companies need to get these reports audited? I’ve heard there’s a difference between limited and reasonable assurance- what does that mean?

Kristen: Good question! So this is a key issue because we’re no longer talking about voluntary reporting: The Sustainability Report has to comply with legislation and company directors have a legal duty of care to ensure the reporting meets relevant sustainability standards, including auditing requirements.

The Australian Accounting Standards Board (AASB) is rolling out a phased approach for auditing these reports. For the first couple of years companies are held to a ‘limited assurance’ standard but by 2030, all companies lodging a Sustainability Report will need to audit this at a ‘reasonable assurance’ level.

The key difference between limited and reasonable assurance is the depth of verification. Limited assurance relies more on company-provided information, with less checking of source documents and internal controls. Reasonable assurance, on the other hand, involves a deep dive into emissions data, processes, and controls.

Lily: Got it. And sorry, you mentioned Scope 1, 2, and 3 emissions earlier- can you quickly explain why they matter in all this?

Kristen: Absolutely. Scope 1, 2, and 3 emissions provide a full picture of a company’s carbon footprint. Scope 1 covers direct emissions, so things like fuel burned in company vehicles. Scope 2 is indirect emissions from purchased electricity, heat, or steam. And Scope 3? That’s the big one- it includes everything else up and down the supply chain, like emissions from bought products, transportation, employee commuting, and even how their products are used and disposed of. Since Scope 3 often makes up the biggest chunk of emissions, its inclusion in mandatory reporting is a game-changer for accountability.

Lily: So, if a business wants to get ahead of these requirements, what’s the best next step?

Kristen: Start now. The first Sustainability Reports are due this year with more businesses required to report as the rollout continues. Without early access to data, companies will not be able to track progress, and scrambling to meet requirements last minute could eventually lead to penalties. Finally, the standards require consistency in calculation methods so that reports can be comparable across periods, so best to pick a platform that you intend to stick with.

My advice is that companies should choose a platform or tool that allows for real Scope 3 data, encourage suppliers to get on it, and start to think about reduction strategies.

Lily: That’s a solid takeaway- get started early and use the right tools. Thanks so much, Kristen! This was incredible insightful!

Kristen: Anytime! The landscape is shifting quickly, but the goal is clear- more transparency, better accountability, and ultimately, meaningful emissions reductions.