Climate reporting obligations in Australia are changing. From 2026, many mid‑sized and larger companies will be required to disclose climate‑related risks, opportunities, and greenhouse gas emissions in their annual reports. For Group 2 and Group 3 entities, this means preparing well in advance, with robust energy data records and internal frameworks to support reporting under the new Australian climate disclosure standard.
A firm foundation in energy data is essential because emissions reporting depends heavily on electricity, gas, and fuel consumption. Engaging with Electricity and Gas Providers early and developing an energy strategy that aligns with reporting requirements will ensure smoother compliance and clearer financial outcomes when obligations begin.
This checklist outlines what companies must focus on for 2026–2027 climate reporting, with practical steps to prepare energy data, set governance practices, and integrate energy management into compliance planning.
Understanding Group 2 and Group 3 Reporting Thresholds
Australian climate disclosure rules group entities based on size and reporting obligations. Group 2 entities begin mandatory reporting for financial years starting on or after 1 July 2026. Group 3 follows for financial years starting on or after 1 July 2027.
To determine group classification, a company must meet at least two of the following criteria:
- Consolidated revenue above $200 million: (Group 2) or $50 million (Group 3)
- Consolidated gross assets above $500 million: (Group 2) or $25 million (Group 3)
- Number of employees: 250+ (Group 2) or 100+ (Group 3)
For Group 2, the first sustainability report will cover FY27, meaning these businesses must have complete energy, emissions, and governance data ready by late 2027. Group 3 entities will follow for FY28 reporting.
Group classification also affects how Scope 3 emissions – greenhouse gas emissions occurring in the value chain – are treated. These become mandatory from year two of reporting, where data is reasonably available.
Getting Energy Data Ready for Emissions Reporting
Energy consumption lies at the heart of climate disclosures. Scope 1 and Scope 2 emissions require accurate records of direct emissions from onsite fuel use and indirect emissions from purchased energy sources such as electricity.
To prepare:
- Collect historical energy bills: For electricity, gas, and fuels used across all facilities.
- Consolidate this data: Into a central repository, ensuring consistency in units and date ranges.
- Address gaps in billing or consumption records early: Missing data could weaken baseline emissions figures.
For many companies, energy bills are scattered across departments, sites, and even outsourced services. Bringing this data together early avoids last‑minute collection stress and improves accuracy. In cases where the data is unclear or incomplete, working with an energy adviser helps standardise the consumption records required for emissions calculations.
Climate Disclosure Checklist: What to Do First
1. Confirm Your Group Classification
Determine whether your business qualifies as Group 2 or Group 3 based on revenue, assets, and employee count. This sets the timeline for reporting obligations.
2. Consolidate Historical Energy Consumption
Compile all electricity and gas data across sites. Base emissions reporting for Scope 1 and Scope 2 on at least one full year of consumption data.
3. Establish Governance Frameworks
Create processes for board oversight of climate‑related risks, including who is responsible for reporting and how risks are escalated within the organisation.
4. Set Emissions Calculation Methodologies
Ensure consistent use of emissions factors and calculation approaches across all data sources. Document assumptions and methods for audit clarity.
5. Start Scenario Analysis Planning
Climate disclosure standards require scenario analysis to test resilience against different warming pathways. Begin planning how to model both high and low warming outcomes for your business.
Why Energy Strategy Matters for Disclosure
Energy procurement decisions directly influence reported emissions and future climate strategy. Choosing the right energy plan, understanding consumption patterns, and consolidating contracts can lower emissions and support compliance.
Energy data also informs strategic decisions, such as:
- Identifying energy efficiency opportunities
- Reducing demand peaks
- Evaluating renewable energy options
- Forecasting future energy costs
For example, if a group is looking at long‑term energy pricing strategies, comparing offers from electricity and gas providers could uncover better cost and emissions outcomes. Companies may even Switch Energy Supplier to access plans with lower grid emissions factors or better reporting data access.
Balancing cost and climate outcomes matters. Some companies choose plans that leverage renewable energy sources or supplier incentives. Practical energy decisions now will help reduce reported Scope 2 emissions and prepare businesses for future sustainability goals, especially when evaluating structured options such as the EnergyAustralia Secure Saver plan that may offer both emissions tracking and stable pricing benefits.
Effective Energy Procurement as Part of Climate Planning
Energy procurement should be approached strategically when building climate disclosure systems. Key considerations include:
- Contract flexibility: Short‑term agreements allow alignment with climate strategy cycles.
- Supplier transparency: Clear access to consumption data supports accurate emissions measurement.
- Renewable energy options: Sourcing green power can reduce overall emissions figures.
Large energy retailers sometimes have specific offerings aligned with corporate needs. For example, an AGL Electricity Plans Provider in Australia may offer bespoke contract terms that match multi‑year sustainability strategies for large energy users.
When evaluating offers, companies should consider both commercial and carbon outcomes. In some instances, this may involve a decision to switch energy suppliers if existing contracts limit reporting clarity or restrict access to detailed usage data.
Integration of Emissions Reporting and Compliance Tools
Climate disclosure isn’t just a spreadsheet exercise. Reporting standards require documentation of governance, risk management, strategy, and targets alongside emissions metrics.
Companies should ensure:
- Internal systems: Can produce consistent reports across all business units.
- Energy data is auditable: With clear sources and traceable calculations.
- Internal controls exist: For review and sign‑off before submission.
Climate reporting assurance is also expected. External auditors will verify the robustness of the data and methodology. This makes having structured energy records – including consistent consumption bills and meter data – vital for certification processes.
Addressing Scope 3 Emissions and Supply Chain Data
Scope 3 emissions, typically the largest portion of value chain emissions, must be assessed where reasonable data exists. This may require reaching out to suppliers for their consumption and emissions data.
Preparing for supply chain reporting involves:
- Identifying: Key upstream and downstream activities that produce emissions.
- Engaging with suppliers: On energy use, emissions reporting, and forecasts.
- Collecting consistent data formats: For integration into your emissions calculation.
Even if your group determines that Scope 3 risks are not material, documenting the rationale and data used to reach this conclusion is essential for compliance integrity.
Common Pitfalls and How to Avoid Them
Companies beginning climate reporting often make the following mistakes:
- Waiting until the compliance year to gather energy data.
- Using inconsistent calculation methods across sites.
- Losing historical billing records or failing to document energy use assumptions.
- Not aligning energy procurement strategy with climate goals.
Avoid these by starting climate disclosure preparation early, documenting every step, and integrating energy strategy with compliance planning.
Practical Reporting Timeline
Here’s a preparation timeline that aligns with mandatory reporting dates:
| Timeline | Action
|
|---|---|
| Now | Confirm group classification; consolidate historical energy data |
| Early 2025 | Set governance and reporting frameworks |
| Mid 2025 | Complete emissions baseline for Scope 1 and 2 |
| Late 2025–2026 | Implement data systems; engage auditors; scenario planning |
| 2026–2027 | Prepare first sustainability report for Group 2 |
| 2027–2028 | Prepare first sustainability report for Group 3 |
This timeline ensures energy data and internal processes – essential components of disclosure – are ready long before lodgement deadlines.
Energy Data Tools and Reporting Readiness
Energy consumption platforms and data management systems can drastically reduce workload when preparing climate disclosures. For organisations with multiple sites or complex procurement arrangements, adopting tools that:
- Track consumption in real time
- Allow drill‑down by site or business unit
- Generate standard emissions reports
This makes emissions reporting easier and supports strategic energy decisions.
Comparing market offerings for data access and analytics can also influence your energy procurement strategy. Some providers bundle analytics with supply, while others provide raw data only.
Closing Checklist for Group 2 and 3 Companies
- Confirm group classification and reporting start date
- Consolidate historical energy consumption data
- Establish internal governance and documentation processes
- Set emissions calculation methodologies (Scope 1 and 2)
- Plan for climate scenario analysis
- Engage auditors early for assurance requirements
- Evaluate energy procurement strategy with emissions goals in mind
- Prepare for supply chain (Scope 3) data collection
- Document all assumptions and maintain auditable records
Summing Up
Preparing for climate disclosure takes effort, but it also creates value. Better energy data supports both compliance and strategic energy management. With timelines in place and systems aligned across departments, Group 2 and Group 3 companies can approach reporting with clarity, confidence, and credibility.