Climate reporting for small business
What is mandatory, what is voluntary, and why your clients may still ask for your emissions.
- Most small businesses have no mandatory climate or emissions reporting.
- Exceptions are triggered by what you do, not your size: pollutant thresholds (NPI) and environmental licences.
- Large customers, banks and tenders increasingly ask suppliers for Scope 1 and 2 data, so measuring is becoming a commercial expectation.
When are you a "small business"?
There is no single definition in Australia. It depends on which rule you are looking at:
| Who defines it | Small business means |
|---|---|
| ABS (statistics) | Fewer than 20 employees (medium: 20–199, large: 200+) |
| ATO (tax) | Aggregated turnover under $10 million |
| Fair Work (employment) | Fewer than 15 employees |
| Climate reporting (Corporations Act) | Meets fewer than two of the Group 3 tests: revenue >$50m, gross assets >$25m, >100 employees |
For climate reporting, the last line is the one that matters. If you are above Group 3, read Climate reporting for large business.
What you are not required to do
Sustainability (climate) report under the Corporations Act. Sole traders, partnerships and trusts are not covered. Companies are only covered once they meet two of the three Group 3 tests, with the first reports for financial years starting 1 July 2027.
NGER reporting. The national scheme only applies above 25 kt CO₂-e or 100 TJ of energy at a facility, or 50 kt / 200 TJ for a corporate group. Very few small businesses come close.
What may still apply to you
National Pollutant Inventory (NPI)
Applies to any facility that exceeds the reporting threshold for one or more of 93 listed substances, for example through fuel use, solvents or combustion. Size of business is irrelevant. Reports are due 30 September each year.
Environmental licence returns
If you hold an environmental licence or authority (in Queensland, an environmental authority for an environmentally relevant activity), you may need to lodge an annual return. In Queensland, returns are due 1 April if you receive a notice.
Data requests from large customers
Companies that report under AASB S2 must cover their value chain (Scope 3) emissions, so they may ask suppliers for data. ASIC expects them to rely mostly on estimates and industry averages, and suggests small businesses discuss requests that are costly to meet.
Why measure anyway
- Supply chains: answering a client's emissions questionnaire quickly is an advantage in tenders.
- Finance: some lenders offer better terms for lower-emission assets and businesses.
- Costs: a Scope 1 and 2 inventory is essentially a map of your fuel and electricity spend.
Where to start
1. Use the official emission factors
The National Greenhouse Accounts (NGA) Factors, updated every year by DCCEEW, are the Australian reference for converting fuel and electricity use into tonnes of CO₂-e.
2. Follow a recognised method
The GHG Protocol Corporate Standard defines Scope 1, 2 and 3 and is the basis for most frameworks, including AASB S2.
3. Try a free tool
Business SA offers a free carbon footprint calculator (ClimateClever) for single-site businesses.
4. Optional: certification
Climate Active is the Australian Government-backed carbon neutral certification for businesses that measure, reduce and offset their emissions.
Sources
- ASIC, Sustainability reporting for small business
- Clean Energy Regulator, National Greenhouse and Energy Reporting Scheme
- Business Queensland, National Pollutant Inventory
- Parliamentary Library, Definitions and data sources for small business in Australia
- Accounting Times, Proposed 2026 budget reforms and climate disclosure thresholds
This article is general information, not legal or financial advice.