Legislation alert! Australia’s mandatory climate-related financial disclosure standards have been passed by the Senate. Sophie Schlachter, Sustainability & Business Analyst at Zooss, shares five key points all businesses need to know about the new legislation.
1 New standards have been approved, and it’s the talk of the town!
Mandatory climate reporting legislation has been passed in the Australian Senate, and companies will soon be required to disclose detailed information about their climate-related risks and opportunities, as well as their greenhouse gas emissions profiles, to their shareholders.
2 What’s the aim?
The aim of the standards is to ensure a higher level of quality information is provided to shareholders about the ways in which companies are exposed to, and are managing for, climate-related issues. The ultimate purpose is to guide capital away from highly exposed (risky) and/or “head-in-the-sand” (laggard) companies, towards companies that are enabling the transition to a net-zero economy.
3 What are the standards?
The Australian Sustainability Reporting Standards (ASRS) will have four pillars – Governance, Strategy, Risk Management, Metrics and Targets.
At Zooss we see Strategy and Metrics, and Targets, as the most important. Without the right Metrics and Targets, you can’t deliver a Strategy which will sufficiently manage Risk, irrespective of how well you’re Governed.
4 What does this mean for companies?
Firstly, preparing to report represents a large body of work, and companies need to start straight away, even if they don’t fall into the first group required to report from January 2025 onward.
Secondly, companies must integrate climate considerations into the core business strategy, rather than handling them separately. This might mean new voices at the table, and new datasets for the board’s consideration.
Thirdly, transition plans must be developed, and need to be credible, deliverable, and visible at all key decision-making stage gates.
5 What does this mean for planning?
Ensuring the connectivity of reporting and planning across all facets of a business has never been more critical. Every business unit has something to contribute to a sustainability disclosure, and their contributions need to be auditable, easily amalgamated, and in an ideal world – quickly and seamlessly gathered!
6 Sustainable Business Planning
Sustainable Business Planning models facilitate that exact connectivity of people to data, data to strategy, strategy to risk management, governance, and ultimately, disclosure.
To find out how we can support your organisation to integrate sustainability reporting and planning into your traditional business planning process, contact us.
Better Planning. Better Planet.