Case study: Sustainability ReportingAustralia has recently introduced mandatory sustainability reporting for large businesses and financial institutions. The new rule requires very large businesses and financial institutions to provide more information about their material financial risks and opportunities relating to climate change to their investors and lenders.The new requirements commenced for the largest entities for financial years beginning on or after $1$ January $2025$ and will gradually apply to other large companies and financial institutions over time. ASIC has published Regulatory Guide $280-$ Sustainability reporting which includes guidance on determining who must prepare a sustainability report. Under Chapter $2$M of the Corporations Act $($Ch $2$M$),$ entities that are required to prepare an annual financial report under Ch $2$M for a financial year and meet one of the sustainability reporting thresholds in s$292$A$,$ are required to prepare a sustainability report. The Australian Parliament has prioritised the introduction of climate$-$related financial disclosures. It is the fourth report required as part of these entities' annual reporting obligations, alongside the financial report, directors' report, and auditor's report. Climate$-$related financial disclosures will contain information on climate$-$related governance, risk management, strategy and metrics, and targets. These developments in Australia reflect similar changes underway in many other countries around the world and aim to improve the quality of information available for decision making to help keep Australia an attractive place to invest.$($Source: ASIC, Australia$)$REQUIREDa$)$ Discuss two reasons that account for Australia's recent implementation of mandatory sustainability reporting. $(5$ marks$)$Using the following theories, explain why corporations that are not subjected to mandatory sustainability reporting $($SR$)$ might choose to make voluntary SR disclosures.b$)$ Positive Accounting Theory$(5$ marks$)$c$)$ Legitimacy Theory$(5$ marks$)$d$)$ Stakeholder Theory$(5$ marks$)$e$)$ Institutional theory$(5$ marks$)$f$)$ Provide two examples of activities that are considered to have an impact on the sustainability performance of a company.$(5$ marks$)$