Australia sharpens climate ambition as businesses face new disclosure realities
Australia’s sustainability landscape has accelerated over the past two months, with August and September marked by significant policy updates and growing investor expectations. The headline development was the Federal Government’s announcement of its proposed 2035 climate target, which will shape the nation’s decarbonisation pathway and frame corporate strategy for the decade ahead.
Australia’s 2035 climate target – a defining decision
In late August, the Climate Change Authority recommended that Australia cut emissions by 65–75% below 2005 levels by 2035, setting the benchmark for one of the most consequential climate decisions in the country’s history.
The proposed target is not just political symbolism – it has immediate implications for business:
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Global alignment: The range positions Australia closer to the ambition of major trading partners, including the EU, US and Japan, reducing exposure to carbon border adjustment mechanisms.
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Investment signals: Stronger targets provide certainty for capital markets, directing investment toward renewables, low-carbon manufacturing and nature-positive infrastructure.
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Disclosure pressure: Companies will need to show how their transition plans align with national commitments, particularly as mandatory climate reporting rolls out under AASB standards in 2025.
What this means for corporate leaders
For executives, sustainability managers and boards, the message is clear: climate ambition is no longer optional. Regulators, investors and customers will increasingly benchmark corporate performance against Australia’s national targets.
Naturaliste Solutions’ Managing Director, Rebecah Ettridge, reflected:
“This target is more than a policy marker – it’s a call to action for business. Organisations that treat climate data as a strategic asset, rather than a compliance burden, will unlock capital, contracts and competitive edge.”
Connecting Australia to global momentum
These domestic updates come at a time when global ambition is also accelerating. Climate Week New York 2025 reinforced the urgency of delivering “better, cheaper, faster” climate solutions — from scaling renewable energy to integrating nature and biodiversity into financial systems.
Key themes included:
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Implementation over pledges: The focus has shifted from making commitments to proving measurable outcomes.
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Capital mobilisation: Global investors called for innovative financing structures that can deliver decarbonisation at speed and scale.
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System-level transformation: Collaboration across industries and borders was emphasised as critical to achieving net zero within the narrowing timeframe.
Australia’s 2035 target situates the nation within this global narrative. Companies operating locally and internationally must recognise that credibility now depends on aligning with both national and global decarbonisation trajectories.
Rising expectations from investors and stakeholders
The past quarter has also seen investors sharpen their scrutiny. ASX100 analysis shows that while most companies acknowledge climate risks, there is still significant divergence in how targets, offsets and transition strategies are disclosed. The new 2035 target — alongside global investor signals from Climate Week — is likely to narrow this gap, driving demand for greater comparability and accountability.
Crucially, 2025 marked the first reporting cycle under AASB S1 and S2. With most large companies having now released their initial reports:
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AASB S1 has highlighted the need for consistency in how material sustainability-related risks and opportunities are defined and disclosed. Many companies have faced challenges balancing breadth with clarity, often overwhelming readers with immaterial data.
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AASB S2 has raised the bar on climate-related disclosures, requiring alignment with governance, strategy, risk management and metrics/targets. Investors are particularly focused on the credibility of scenario analysis, transition planning, and Scope 3 emissions reporting.
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Market response: Early reports show that companies with well-integrated governance structures and data systems are already building trust with investors, while those treating reporting as a compliance exercise risk reputational and financial penalties.
Stakeholders are no longer satisfied with generic commitments. They want credible, science-aligned pathways that demonstrate resilience to policy tightening and physical climate impacts.
Key takeaways for business
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Strengthen transition planning: Review current targets and ensure alignment with a 65–75% reduction trajectory.
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Integrate disclosure: Use AASB S1 and S2 as the backbone for credible sustainability and climate reporting.
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Engage investors early: Proactively communicate credible pathways to net zero and demonstrate governance oversight.
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Stay globally connected: Monitor outcomes from global forums like Climate Week to ensure strategies remain internationally competitive.
Looking ahead
As Australia edges closer to finalising its 2035 target, companies cannot afford to wait. The decisions made today on capital allocation, energy procurement and supply chain engagement will determine whether businesses remain competitive in a rapidly decarbonising economy.
Naturaliste Solutions continues to support organisations in turning ESG data into actionable intelligence, helping leaders move beyond compliance to capture opportunity.
Contact us to discuss how Naturaliste Solutions can support your transition planning and disclosure strategy.