How Climate Reporting Requirements May Soon Affect Subcontractors

New Federal climate reporting laws have officially kicked in and while they target large companies and financial institutions, the ripple effects may soon reach the rest of the construction industry including you!

Under the Federal Government’s new climate reporting framework, large companies and financial institutions have already commenced mandatory climate impact reporting.

Even if your business isn’t directly required to report, you could soon be asked to share information about your operations, energy use, and sustainability practices with the larger builders and developers you work alongside.

From 2026, these requests are expected to ramp up as reporting entities must start disclosing their Scope 3 emissions. These are the indirect emissions generated throughout their supply chains, including subcontractors and suppliers.

The good news? Most Scope 3 data will rely on reasonable estimates determined by the large entities based on industry averages as opposed to sourcing information directly from their supply chain.

However, being ready to respond early could set you apart, helping your business stand out when tendering for projects and building partnerships in a more sustainability-focused industry.

What Might You be Asked to Report On?
Examples of information larger contractors ask from you include:

• Carbon footprint of the goods and services you purchase
• Your energy consumption, including electricity and fuel use
• Waste management practices
• Employee commuting patterns, like travel frequency and transport methods

How Can You Prepare?

To get ahead of the changes:

• Identify the key environmental data you can begin tracking now
• Consider integrating basic data-tracking tools into your existing systems (for example, through accounting or inventory software)
• Develop internal processes for monitoring energy use and waste management
• Work collaboratively with suppliers to share relevant data efficiently

Even if you’re not reporting yourself, being “climate-ready” now can help future-proof your business and open doors to new project opportunities as the industry shifts toward greener standards.

Find out more here.