Who has to report, and from when?
A company that prepares an annual financial report under the Corporations Act must also prepare a sustainability report once it meets two of three size tests for its group, counting the entities it controls:
| Group | Revenue | Gross assets | Employees | Financial years beginning on or after |
|---|---|---|---|---|
| Group 1 | $500m or more | $1bn or more | 500 or more | 1 January 2025 |
| Group 2 | $200m or more | $500m or more | 250 or more | 1 July 2026 |
| Group 3 | $50m or more | $25m or more | 100 or more | 1 July 2027 |
Registered reporters under the National Greenhouse and Energy Reporting Act are caught too, as are some large superannuation funds and managed investment schemes. A Group 3 company whose directors find no material climate risks or opportunities can lodge a statement saying so, but it still has to do the assessment and keep the records behind it.
A 2026 to 2027 Budget proposal would lift the Group 3 revenue and asset tests. It had not been legislated when this page was checked, so the figures above still apply.
What goes in the first report?
Climate related financial disclosures under AASB S2, lodged with the annual financial report. The emissions part is split three ways. In store terms:
| Scope | What it covers | At a store |
|---|---|---|
| Scope 1 | Direct emissions from sources the company owns or controls | Gas for heating or cooking, diesel in a generator, and refrigerant that leaks from cases, cool rooms and air conditioning |
| Scope 2 | Purchased electricity, heating and cooling | The power bill: lighting, refrigeration, air conditioning, screens |
| Scope 3 | Everything else in the value chain | Goods bought for sale, freight, contractors, waste |
Scope 1 and Scope 2 are reported from the first year. AASB S2 gives relief from Scope 3 in the first annual reporting period. Statements about Scope 3, scenario analysis and transition plans also carry modified liability for financial years beginning 1 January 2025 to 31 December 2027: in that window only ASIC, or a criminal prosecution, can act on them.
How is a store's Scope 2 worked out?
The location based method multiplies the electricity used by the emission factor for that state's grid. The factors are published each year by the Department of Climate Change, Energy, the Environment and Water in the National Greenhouse Accounts Factors.
Scope 2 in tonnes of CO2e = kilowatt hours used x state factor in kg CO2e per kWh / 1,000.
ASIC's own worked example, from its educational module and using the 2025 factors:
| Site | Electricity used | 2025 factor | Scope 2 |
|---|---|---|---|
| Two sites in NSW | 2,000,000 kWh | 0.64 kg CO2e/kWh | 1,280 t CO2e |
| One site in Queensland | 500,000 kWh | 0.67 kg CO2e/kWh | 335 t CO2e |
A company that buys renewable power under contract can also report on the market based method. GreenPower carries a factor of zero. Electricity not covered by a contract uses the national residual mix factor, 0.81 kg CO2e per kWh in the 2025 factors, which is higher than the grid average.
Where store energy data usually breaks
- Stores in a shopping centre on an embedded network or a recharge, where the retailer sees a share of a bill and never a meter read
- Estimated bills, which carry through to the report unless they are replaced by actual reads
- Stores opened, closed or refitted part way through the year
- Refrigeration and air conditioning with no register of gas type and charge, so leaks cannot be counted in Scope 1
Each of those is fixable before the first reporting year closes, and much harder to fix afterwards.
What cuts Scope 2 at a store?
The large electrical loads in a store are refrigeration, lighting and air conditioning, so that is where reductions come from:
- LED lighting in place of fluorescent tubes, which are also being phased out of supply
- Aerofoils on open refrigerated cases, which keep more of the cold air in the case
- Air curtains on cool room doors that stand open for deliveries
- Air conditioning serviced to a schedule, with filters and coils kept clean
Every reduction should be evidenced per store, with readings before and after, because the report has to stand up to assurance. Nextage runs this as a program: an audit that finds the load, the works that cut it, and before and after readings per store where the retailer wants the saving shown.
