Commuters captured under tough climate regime

afr.com:

Carbon emissions caused by employees commuting to work or on business trips will need to be disclosed under mandatory new accounting standards being released on Monday, as activists and investors target firms over the detail of their net-zero carbon targets.

The Australian Securities and Investments Commission will be enforcing the climate disclosures that will initially apply to the country’s biggest companies from next year before being expanded to smaller firms.

Executives and board members are being warned they could be held responsible for a larger range of emissions than are now considered, including across 15 categories of so-called scope 3 emissions.

These will include emissions related to waste generated by operations; employees commuting; business travel; the use of sold products and their end-of-life treatment. So-called fly-in-and-fly-out trips would be captured as would business-class travel.

ASIC chairman Joe Longo has put companies on notice that the coming regime will be the “biggest change to corporate reporting in a generation”.

The mandatory rules initially apply from next year to companies with more than $1 billion in assets, $500 million in revenue or 500 employees, but will then be phased in over three years down to companies with $25 million in assets, $50 million in revenue or 100 employees by 2027-2028.

The extent of the challenge was yet to dawn on most company managers, said Jo Gorton, assurance managing partner at Deloitte’s, even though class action lawyers would be shut out for the first three years while ASIC enforced the rules.

“You cannot underestimate the significance of this change,” she told The Australian Financial Review on Sunday. “It’s very broad and it is not just limited to