Clarifying obligations under Australia’s climate reporting framework
As Australia enters a new phase of mandatory climate‑related reporting, many organisations are facing uncertainty about how existing emissions obligations interact with newer disclosure requirements.
In particular, there is widespread confusion between:
- NGERS reporting, and
- Scope 3 emissions disclosure under mandatory climate‑related financial reporting
Understanding the distinction is critical to avoiding unnecessary work, managing risk, and building reporting that remains defensible over time.
What NGERS requires
The National Greenhouse and Energy Reporting (NGERS) Scheme is Australia’s established framework for collecting consistent information on greenhouse gas emissions and energy use.
Under NGERS, registered controlling corporations are required to report:
- Scope 1 greenhouse gas emissions
- Scope 2 greenhouse gas emissions
- Energy production and energy consumption
NGERS is an operational reporting regime. Its purpose is to support national emissions accounting, government policy development, and the administration of mechanisms such as the Safeguard Mechanism.
Importantly:
Scope 3 emissions are not reported under NGERS.
While organisations may calculate Scope 3 emissions for internal analysis or planning purposes, these emissions are not submitted to the Clean Energy Regulator and do not form part of NGERS compliance.
Where Scope 3 obligations actually arise
Scope 3 reporting obligations arise from Australia’s mandatory climate‑related financial disclosure legislation, not from NGERS.
In September 2024, amendments to the Corporations Act 2001 introduced mandatory climate‑related financial disclosures for certain entities. These disclosures are supported by the Australian Sustainability Reporting Standards (ASRS) issued by the Australian Accounting Standards Board.
Of particular relevance is AASB S2 – Climate‑related Disclosures, which is mandatory for in‑scope entities and aligned with the international IFRS S2 standard.
For entities required to apply AASB S2, disclosures may include:
- Scope 1, Scope 2 and Scope 3 greenhouse gas emissions
- Value‑chain emissions measured using the GHG Protocol
- Disclosure of assumptions, estimation techniques, exclusions and limitations
- Information intended for investors, boards and financial markets
These disclosures sit within the organisation’s annual reporting framework and, over time, are subject to increasing levels of external assurance.
Why NGERS reporters are often affected — but not automatically
Many NGERS reporters will also fall within the scope of mandatory climate‑related financial disclosures due to their size, structure, or reporting obligations under the Corporations Act.
However:
- NGERS registration alone does not trigger Scope 3 disclosure
- Scope 3 obligations arise only where an entity is within scope of the mandatory disclosure regime
- The purpose, audience, and reporting logic are fundamentally different
NGERS data is operational and facility‑focused.
Mandatory climate disclosures are financial‑market focused, risk‑oriented, and forward‑looking.
A common and costly misunderstanding
A frequent response to the new disclosure regime is to treat Scope 3 as an “extension” of NGERS.
This often leads organisations to:
- Attempt to integrate Scope 3 into NGERS systems prematurely
- Commission full Scope 3 inventories without clear boundaries or materiality thresholds
- Engage suppliers before understanding disclosure requirements
- Produce emissions figures that lack a clear narrative or defensibility
As assurance expectations increase, this approach can create both inefficiency and risk.
What most organisations need first
For many organisations, the immediate requirement is not a complete or highly detailed Scope 3 inventory.
What is required first is a structured and defensible foundation, including:
- Clear definition of Scope 3 boundaries
- Identification of materially relevant value‑chain categories
- Documented inclusion and exclusion decisions
- Proportionate estimation approaches aligned to recognised standards
- Transparent documentation of assumptions and data limitations
- A staged roadmap for improving Scope 3 maturity over time
This approach supports compliance while maintaining credibility as disclosure requirements evolve.
Our approach
At Emission Statement, we help organisations navigate the intersection between:
- Operational emissions reporting under NGERS, and
- Mandatory climate‑related financial disclosures under the Corporations Act and ASRS
Our focus is on:
- Clarifying regulatory obligations and regime boundaries
- Supporting defensible Scope 3 positioning aligned to disclosure requirements
- Developing documentation and artefacts that stand up to scrutiny over time
- Sequencing effort appropriately, rather than over‑engineering too early
The objective is not early perfection, but clarity, proportionality, and confidence.
Moving forward with confidence
As mandatory climate disclosures mature and assurance expectations increase, organisations that clearly separate their obligations and adopt a deliberate, staged approach to Scope 3 will be best placed to respond.
Understanding the role of mandatory disclosure legislation — alongside NGERS — is an essential starting point.
Emission Statement 
Leave a comment