Australian Sustainability Reporting Standards (ASRS) are finally here. The Treasury Amendment (Financial Market Infrastructure and Other Measures) Act 2024 requires entities reporting under the Corporations Act to produce annual reports disclosing climate-related financial information. Companies are divided into three groups, with Group 1 kicking off reporting on January 1, 2025, followed by Group 2 on July 1, 2026, and Group 3 on July 1, 2027.
As anticipated, this shift brings a host of challenges. Businesses need to build solid governance structures, gather accurate data, and effectively manage climate-related risks—all while ensuring they meet the new standards. It’s a major change that requires not just a new approach, but a fresh mindset.
The Sustainability Reporting Summit 2025 returns in February to unpack the latest regulatory requirements and provide effective strategies you can implement in your organisation.
Quest Events spoke with two of the event speakers – Dr Clare Anderson (Group Director of Sustainability Performance, Worley), and Rebecca Jinks (ESG & Sustainability Director at Taronga Ventures, and Impact Director, Strategy, at ARENA), for their insights and advice.
What steps should organisations take to conduct a gap analysis for sustainability reporting under ASRS?
“First and foremost, organisations need to understand the sustainability issues covered by the ASRS, including environmental, social, governance (ESG) factors, climate risk, and other material aspects,” advises Jinks. “This will help with the process of familiarising themselves with the requirements of the legislation.”
Anderson agrees: “Start with understanding the requirements of the standards – particularly S2, as it is mandatory – and then assess readiness against these requirements, taking note of quantitative requirements,” she says.
For organisations that have undertaken voluntary reporting in the past, much of the current framework may possibly be (to use an industry term): recycled.
“They should understand the current practices they have in place, the processes that exist, and map out the gaps that need to be filled to meet the regulatory requirements,” continues Jinks. “If they have not already done so, a materiality assessment must be completed from which a deeper dive into gaps in process and delivery can take place.”
Jinks recommends organisations should also consider developing a matrix or checklist that measures existing reporting processes and outputs against the ASRS. This should highlight:
- Disclosures: What disclosures are required of ASRS? Are all required disclosures (financial and non-financial) being made? Is there enough transparency in the information?
- Metrics: Are the right sustainability metrics (e.g., carbon emissions, water usage, waste, social impact) being tracked and reported?
- Governance and Processes: Does the company have the right governance and oversight structures and processes to ensure accurate and transparent reporting? Are data collection and reporting processes aligned with ASRS?
“This should provide clarity of alignment and improvements that need to be made at the organisational level,” Jinks adds.
What key capabilities should teams develop to ensure compliance with ASRS?
Establishing reporting processes is only the beginning. Organisational skills gaps have the potential to undermine sustainability reporting efforts.
“Cross-functional teams need capabilities in scenario planning (understanding climate scenarios), risk management (identification of risk and opportunities), financial modelling, and the ability to assess the impact on business planning/strategy,” urges Anderson. “They also require expertise in data quality and management systems for disclosures to pass third-party assurance requirements.”
Jinks recommends taking the time to understand your team’s sustainability experience, running regular materiality assessments and establishing good, clear governance for oversight and accuracy.
Who should be included in the working group for sustainability reporting, and what roles are essential?
Having the right people involved is not only essential in terms of meeting capability requirements, but will help establish access to necessary data and lower of risk of reporting efforts being blocked by stakeholders who were not previously involved.
Between them, Jinks and Anderson recommend bringing aboard representatives from Sustainability, Finance, Strategy, Risk, COO/Operations, and Public Affairs..
How can we adopt a risk-led approach to sustainability reporting to better understand and mitigate Director liabilities?
“Company directors need confidence that the company has the appropriate capability and capacity to meet the requirements,” says Anderson. “This includes comfort that the methodology and processes allow for the identification of material climate-related risks and opportunities (R&Os) and that proposed metrics and targets for managing the R&Os are appropriate.”
According to Jinks, ESG risks should be identified and treated as any other highly material organisation risk would be.A risk-led approach might involve:
- Understanding the legal landscape and the requirements of the legislation
- Identify and assessing ESG risks, first and foremost through a materiality assessment (and probably double materiality).
- Analysing emerging risks, including non-financial.
- Integrating ESG risks into the company risk management system, including development of risk mitigation plans.
- Linking sustainability risks to financial reporting and disclosure.
What practical advice would you give to organisations feeling overwhelmed by the shift to mandatory sustainability reporting?
As a vital first step, Jinks recommends engaging a consultant who has experience with deploying materiality assessments, gap analysis and programs to close the gap. “Secondly, having a dedicated sustainability expert on your team (and particularly in your executive team) will ensure high visibility of processes, risks and improvements that need to be made to ensure compliance and good governance,” she adds.
Anderson recommends starting with a cross-functional working group and gap assessment to identify the areas where the most work is needed. “It's important to set up governance early and have conversations with the company leadership and board to ensure that they are aware of what is coming, so they can provide the appropriate support and resources.”
Hear more from Dr Clare Anderson (Worley), Rebecca Jinks (Taronga Ventures, ARENA) and a host of other expert speakers at the Sustainability Reporting Summit 2025 from 25-27 February 2025 at the Sydney Masonic Centre (SMC). Learn more.
To access the detailed conference program, download the brochure here.