Suppliers to Australia’s biggest mining and resources companies stand to win favour with their major Group 1 customers by helping with climate reporting, as AASB S2 obligations reach the supply chain.

Australia’s mandatory climate-reporting regime is already in force for the first group of large entities, which includes many major listed companies, and will be phased in over coming years. Group 1 entities lodge climate disclosures with ASIC under Chapter 2M of the Corporations Act.

Brisbane-based climate-reporting company Arteh said that for many smaller suppliers, the immediate commercial opportunity was not regulation itself, but the growing demand from large clients for emissions data.

The sum of its parts

Arteh chief executive Thomas Key said major miners and large listed companies were now examining emissions across their supply chains.

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“The part of the legislation that will affect Group 1 from next financial year is the requirement for ASX 200 companiesto begin disclosing what are known as their Scope 3 emissions,” he said.

“Scope 3 covers emissions that sit outside a company’s direct control. For a BHP or Rio Tinto, that means looking beyond simply digging material out of the ground.

“You are starting to look at the impact of all the suppliers and factors that contribute to mining, manufacturing, processing and logistics. That can extend to emissions associated with consultants travelling to your site, for example.”

Mr Key said suppliers that could provide useful climate data would be better placed with major customers.

Related: Arteh targets simpler climate reporting for small and medium businesses

“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.”

Good standing

Mr Key said the opportunity for suppliers went beyond compliance.

“Rio Tinto, BHP and other tier-one companies have a strong interest in maintaining their standing as good corporate citizens. To do that, they are going to require more of their supply chain to report emissions associated with major projects,” he said.

“Big business may favour lower-emitting suppliers if that helps their reporting. There are also opportunities for supply chain operators to work on reducing their own emissions. These are real opportunities for suppliers.”

Arteh’s online climate calculator is available through its website.

Arteh is a Brisbane-based climate compliance platform. Find out more at arteh.com.au