b'with GRI and other guidance providers toThese requirements are likely to capture many law Terence Jeyaretnamsupport efficient and effective reporting whenfirms that fall under the reporting requirements of the ISSB Standards are applied in combinationthe Corporations Act.with other reporting standards. MANDATORY CLIMATE The introduction of IFRS S1 and IFRS S2 will haveDISCLOSURE ASSURANCE a significant impact on suppliers like law firms, requiring them to enhance their sustainability- A parallel sustainability assurance standard will related practices and disclosures. This willbe developed by the Auditing and Assurance ultimately contribute to the development of moreStandards Board (AuASB) and is expected sustainable supply chains and help to address ourto closely align with the requirements of the climate challenges. International Auditing and Assurance Standards Board (IAASB).AUSTRALIA PROPOSESAssurance of climate-related disclosures will MANDATORY CLIMATEbe required and based on the proposal in the Treasurys consultation paper the assurance scope DISCLOSURE will expand each year;Locally, the development of the InternationalInitially, in FY25, for the very large entities, Sustainability Standards Board (ISSB) globalthis will be required to provide limited sustainability disclosure standards, IFRS S1 andassurance of Scope 1 and Scope 2 emissions IFRS S2 has prompted Treasury to commenceand reasonable assurance for governance consulting on a mandatory climate disclosuredisclosuresproposal with its Climate-related financial disclosure: Second consultation paper released onBy FY28 reasonable assurance of all climate 27 June.disclosures will be required for those very Treasury proposes to use the Corporations Actlarge entities; andto require all entities that lodge financial reportsBy FY31 reasonable assurance will be required under Chapter 2M to make climate-relatedfor all entities making climate-related financial financial disclosures. The climate-disclosuredisclosures.standard will be developed by the AustralianIt is very likely that the assurance of this disclosure Accounting Standards Board (AASB) and isfrom larger companies will cascade down to its expected to closely align with the requirements ofsuppliers, including law firms, which will also need ISSBs IFRS S1 and IFRS S2.to produce verifiable data regarding the emissions It also emphasises the importance of disclosingrelated to performing its services.the steps companies are taking to mitigate theseWhile many of these dates are into the future risks and capitalize on opportunities arising fromdepending on the size of the firm, the processes the transition to a low-carbon economy. of planning, creating systems, obtaining pre-A three-phased approach to implementation hasassurance and finally preparing for actual been proposed with: assurance engagements has very long lead times. Phase one - FY 2025 onwards - VeryThis means that this work will be ramping up in large entities with two or more of: 500many companies immediately. employees;$1b consolidated gross assets;Further Reading$500m consolidated revenue) https://www.ifrs.org/issued-standards/ifrs-Phase Two - FY 2027 onwards - Large entitiessustainability-standards-navigator/with two or more of: 250 employees; https://www.linkedin.com/pulse/ifrs-sustainability-$500m consolidated gross assets;$200mdisclosure-standards-treasury-paper-meg-fricke/ consolidated revenue) Phase Three - FY 2028 onwards - otherhttps://www.ey.com/en_au/climate-change-entities with two or more of: 100sustainability-services/navigating-the-new-frontier-employees;$25m consolidated gross assets;of-sustainability-standards$50m consolidated revenue) or controllinghttps://treasury.gov.au/consultation/c2023-402245corporations under the NGER Act 22'