Big businesses will this year have to report their environmental impacts – but this alone won’t drive change

illuminem summarizes for you the essential news of the day. Read the full piece on The Conversation or enjoy below:

🗞️ Driving the news: Starting this year, large businesses in Australia will be required to report their environmental impacts, climate risks, and opportunities, as part of new mandatory climate disclosure laws expected to be finalized soon
• This move is aimed at increasing transparency and encouraging corporate sector change towards sustainability

🔭 The context: These forthcoming regulations are inspired by the International Sustainability Standards Board's sustainability standards and climate disclosures, aiming to align Australia with similar international efforts
• The disclosure will include both direct and indirect greenhouse gas emissions, with phased inclusion of various-sized companies over time
• However, the draft legislation allows for exemptions and limited liability concerning Scope 3 emissions reporting initially

🌍 Why it matters for the planet: While these laws aim to nudge businesses towards sustainability, the author argues they will not suffice to drive significant emissions reduction without a carbon tax or other policies that directly incentivize lowering emissions
• The focus on disclosures might lead to more transparency but not necessarily to the substantial operational changes needed for a low-carbon future

⏭️ What's next: For these disclosures to lead to genuine environmental improvement, they must be paired with supportive government policies and corporate willingness to invest in sustainable practices and technologies
• The laws also underscore the need for upskilling in climate and environmental reporting, as well as the potential for rethinking business operations towards greater sustainability

💬 One quote: "By themselves, climate disclosures will not trigger the change we need," (Martina Linnenluecke, Professor of Environmental Finance)

📈 One stat: Scope 3 emissions can account for 65–95% of a company's overall emissions, highlighting the significant impact of indirect emissions on a company's environmental footprint

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