The sustainability landscape for Australian business is changing fast. As new climate-related reporting standards take effect, companies are shifting from voluntary commitments to mandatory transparency - and real estate strategy is at the centre of that change.

New JLL research, The Race to Decarbonise, indicates, across Australia’s major office markets, net-zero ambition is now mainstream. 85% of Sydney, 82% of Melbourne, and 97% of Canberra occupiers with large tenancies have published net-zero targets - a significant rise since 2023. Globally, companies with science-based targets have increased 227% in 18 months, while 65% of GRESB participants now set net-zero goals - up 15% year-on-year.

“The acceleration in net-zero commitments shows intent,” says Annabel McFarlane, Head of Strategic Research. “The challenge now is ensuring that intent is matched with credible action and compliance under the new reporting framework.”

“Not all targets are equal,” explains Connor McCauley, Head of Sustainability. “Some organisations focus on near-term Scope 1 and 2 reductions, while others are addressing full Scope 3 value-chain impacts. Both require different delivery pathways - but both need measurable, verifiable progress.”

This complexity is driving a new era of collaboration between landlords and tenants. With Scope 3 reporting becoming mandatory, both parties will need to share emissions data and work collectively to decarbonise.

Australia’s updated Sustainability Reporting Standards (ASRS), aligned with the International Sustainability Standards Board (ISSB), came into effect on 1 January 2025 for the nation’s largest companies.

They require disclosure of Scope 1 and 2 emissions in year one, with Scope 3 reporting mandatory from year two. By 2028, all entities meeting two of three thresholds - ≥100 employees, ≥$50 million revenue, or ≥$25 million assets - will be required to publish sustainability reports.

“Regulatory frameworks like ASRS and ISSB are creating a global baseline for disclosure,” notes Dr Georgia Warren-Myers, Head of ESG & Risk APAC. “Sustainability performance will soon be scrutinised with the same rigour as financial results.”

Sustainability is no longer a reporting exercise - it’s a core component of financial value.

“Transparency builds trust, and trust attracts capital,” says McFarlane. “Investors are rewarding companies with credible, data-driven sustainability strategies - not just good intentions.”

For landlords and occupiers alike, the shift from commitments to compliance represents both a challenge and an opportunity - to embed sustainability as a true business advantage.