Suppliers that can give large customers dependable Scope 3 emissions data may find themselves in a stronger commercial position as Australia’s mandatory climate-reporting regime works its way through the supply chain.
That is the view of Brisbane climate-reporting platform Arteh, which said the immediate pressure for many smaller businesses is less about filing their own disclosures and more about meeting the data requests of bigger clients.
Australia’s climate-repor...
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ting rules are already applying to the first wave of large entities under Chapter 2M of the Corporations Act, with the regime being phased in over time. According to guidance on the Australian Accounting Standards Board’s AASB S2 standard, the mandatory requirements begin with large entities and extend later to medium and smaller organisations as thresholds are met.
Arteh chief executive Thomas Key said major miners and other listed groups were now looking closely at emissions across their supply chains.
He pointed out that the next stage for Group 1 companies includes reporting Scope 3 emissions, which cover emissions outside a company’s direct control. For a miner such as BHP or Rio Tinto, that means looking well beyond extraction and into the emissions tied to contractors, processing, logistics and other parts of the value chain.
According to Dentons, the treatment of Scope 3 is one of the more difficult parts of the new regime because methodologies are still uneven across companies. The firm also noted that there is a grace period for Scope 3 reporting, giving organisations more time to build systems and gather data.
Mr Key said that for suppliers, the opportunity is not simply to stay compliant but to become more valuable to customers.
“Large suppliers to BHP already have to report this,” he said.
“If you are helping your client do business, you become a solution provider and are likely to be looked on more favourably than another supplier who cannot contribute in the same way.”
He added that the pressure could be felt well beyond the biggest miners. Rio Tinto, BHP and other tier-one companies have an interest in presenting themselves as responsible corporate citizens, and that is likely to translate into greater demands on contractors and service providers working on major projects.
Industry commentary on AASB S2 suggests that this effect will be especially relevant for Queensland SMEs in sectors such as mining services, transport, logistics and construction, where customers are increasingly expected to ask for carbon data, emissions disclosures and climate-risk information even where the SME itself is not yet directly reporting.
Arteh says that suppliers able to supply reliable emissions information, or even make progress on lowering their own footprint, may be better placed to retain work as climate reporting becomes part of normal procurement. The company also offers an online climate calculator through its website.
Source: Noah Wire Services
