Stepping up to mandatory scope 3 emissions reporting: practical considerations for a smooth transition

Mandatory Scope 3 emissions reporting in Australia, effective from January 2025, marks a significant shift in climate-related financial disclosures. Organisations must now account for indirect emissions across their value chains, including upstream and downstream activities. This transition requires a structured approach to identifying relevant emissions categories, establishing organisational boundaries, and collecting data—often starting with estimates and secondary sources before refining with primary data over time.

The reporting process demands collaboration across internal departments such as procurement, logistics, and sales, and calls for careful documentation of assumptions and methodologies to support future assurance. Entities are encouraged to consider setting emissions reduction targets, even though not required, especially where Scope 3 emissions represent a substantial portion of their footprint. These targets can be absolute or intensity-based and should be backed by clear strategies and resource planning.