Company directors are warning the federal government not to rush new rules which will require companies to report on their water use, supply chains and human rights, despite warnings by former superannuation fund chief David Atkin that Australia is “cherry-picking” new global sustainability reporting standards.

Labor’s mandatory climate reporting regime passed in the lower house of parliament on Thursday and is due to be phased in over four years from January, after businesses received a six-month reprieve from Treasurer Jim Chalmers. Companies with a turnover of at least $500 million will be forced to report against the new standards first.