CA ANZ and ASBFEO released a guide helping SMEs understand what climate-related information they may be asked to provide by larger business clients.
What’s happening: Mandatory climate-related financial disclosure requirements for large businesses and government entities, which began in January 2025, may flow through to small and medium enterprises in their supply chains. SMEs, particularly those in high-emitting sectors, could be asked to provide greenhouse gas emissions data by the larger organisations they supply.
Why this matters: Whilst SMEs currently have no legal obligation to report greenhouse gas emissions, being prepared for these requests could provide competitive advantages when tendering for work with large businesses or government. Understanding emissions measurement and climate-related reporting now may become a practical necessity for suppliers in certain sectors.
Small and medium enterprises may need to start tracking their greenhouse gas emissions as mandatory climate-related financial disclosure requirements for large businesses begin to flow through supply chains.
Mandatory climate-related financial disclosures commenced for large businesses and financial institutions at the beginning of 2025. However, the requirements could extend informally to smaller suppliers who provide goods or services to these organisations.
“Mandatory climate-related financial disclosures commenced for large business and financial institutions at the beginning of this year, but what smaller businesses may not realise is this could also affect them,” said Ainslie van Onselen, CEO of Chartered Accountants Australia and New Zealand.
“While there is currently no obligation for small business to report information relating to their GHG emissions, if SMEs are in the supply chain for large businesses or government, they may be asked to provide this information, especially if they are in high-emitting sectors such as Energy, Agriculture and Transportation and Logistics.”
The implication is that whilst small businesses face no legal requirement to measure or report their emissions, commercial relationships with larger organisations may create practical pressure to gather this information.
Sector-specific impact
The impact is likely to be most significant for SMEs operating in high-emitting sectors including energy, agriculture, and transportation and logistics. Businesses in these industries that supply to large corporations or government entities may find emissions data requests becoming a standard part of procurement processes.
Chartered Accountants ANZ and the Australian Small Business and Family Enterprise Ombudsman have collaborated to produce a guide to help SMEs understand what information they may be asked by larger businesses regarding their greenhouse gas emissions.
The guide urges small businesses to gain a better understanding of the value chain in which they operate and assess where greenhouse gas emissions might be occurring within their business.
Competitive advantage potential
Bruce Billson, Australian Small Business and Family Enterprise Ombudsman, suggested that early preparation could benefit SMEs commercially.
“I encourage SMEs to take the time to read the guide and become familiar with climate-related reporting requirements around GHG emissions. Being prepared and understanding potential reporting obligations could give your business a competitive advantage,” Billson said.
“By including climate-related information in tenders, it will give confidence to potential new clients or customers, that SMEs are prepared and are considering sustainability issues.”
The positioning suggests that whilst emissions reporting remains voluntary for small businesses, those who proactively address the issue may gain advantages in competitive tendering processes, particularly when dealing with large organisations subject to mandatory disclosure requirements.
New guidance available
The climate-related financial disclosures guide for SMEs is available for download from CA ANZ’s website and ASBFEO’s website. The guidance is designed to help small businesses understand the measurement and reporting frameworks that larger organisations are using, enabling suppliers to provide relevant information when requested.
The development reflects a broader trend where regulatory requirements imposed on large organisations create indirect effects throughout supply chains, even when smaller businesses remain outside the formal scope of the regulations.
CA ANZ and ASBFEO’s climate-related financial disclosures guide for SMEs can be downloaded from CA ANZ’s website or or ASBFEO’s website
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