Australia’s Treasury has released draft Climate Transition Planning Guidance to help companies prepare for the financial, operational, and governance shifts required to navigate climate risk.
In this article, Sustainability Advisor Sophie Schlachter unpacks the contents of the draft guidance and what it means for business — and explains how organisations can align strategy, finance, and sustainability planning to build resilience for the future.
Business response to climate risks and impacts
The impacts of climate change are among the most significant risks facing medium-to-large businesses today. For most organisations, the first step in responding to climate risks is identifying how they may be affected — and the impacts they contribute to.
But then what?
The next step is determining how to transition the business to mitigate those risks and adapt to the most likely impacts. Climate transition planning is becoming an integral part of strategic planning as organisations respond to the systemic, long-term risks and opportunities of climate change.
What to expect from the draft transition planning guidance
As part of its 2024 Sustainable Finance Roadmap, the Australian Government has committed to publishing voluntary guidance on climate-related transition planning by the end of 2025. Draft guidance has now been released for consultation, giving businesses a preview of what to expect.
Perhaps unsurprisingly, the draft guidance recommends that organisations align their transition plans with the International Financial Reporting Standards’ Transition Plan Taskforce (IFRS TPT) Disclosure Framework, which is already finalised and publicly available.
This approach aligns with the Government’s decision to base its mandatory climate-related reporting standards on the IFRS framework. It also reflects a broader shift toward standardisation — reducing confusion for companies preparing disclosures and for stakeholders comparing them.
Beyond clear communication to financial stakeholders, companies should see the climate-transition planning process as an opportunity to create an executive-endorsed, company-wide, costed, and achievable plan for building a climate-resilient business. Not a small job — but an essential one.
Sophie Schlachter, Sustainability Advisor
What’s in the draft guidance?
Part A: Guiding principles
- Internationally aligned – ensuring consistent, comparable disclosures in global markets.
- Supporting domestic decarbonisation and adaptation – aligning transition plans with Australian climate goals and policy settings.
- Balancing ambition and flexibility – encouraging ambition while recognising varying levels of organisational maturity and sector needs.
- Climate first, but not only – integrating broader social and environmental considerations, including nature-related objectives.
Part B: Draft transition planning guidance
- Role and benefits of transition planning – linking to other sustainable finance initiatives and explaining the underlying principles.
- Transition planning process – outlining the planning cycle and summarising international guidance.
- Preparing transition plans – providing Australia-specific guidance aligned with the IFRS TPT structure.
Recommended plan structure
- Foundations – strategic ambition in responding to climate-related risks and opportunities.
- Implementation strategy – how the ambition will be achieved and its financial implications.
- Engagement strategy – how the organisation will engage its value chain, peers, regulators, customers, and communities.
- Metrics and targets – how progress will be measured and monitored.
- Governance – accountability for delivery and integration into governance structures.
Integrating financial and climate planning
The primary audience for a climate-transition plan is financial stakeholders, including investors and capital providers. The financial planning element of the implementation strategy is therefore critical and should be rigorously derived.
Zooss Consulting recommends fully integrating the financial implications of mitigation and adaptation into existing planning frameworks, rather than treating them as stand-alone analyses.
Improving sustainability and organisational resilience
At Zooss, we specialise in bringing clarity to planning and reporting using data analytics, joining the dots to form insights that influence better decision-making.
By integrating financial, operational and environmental data, we support our customers to achieve the dual goals of improving sustainability outcomes and building organisational resilience.
We call this approach Sustainable Business Planning – and it has the power to deliver better outcomes for business, people, and our planet.
Find out more
- Sustainable Business Planning – Our Solutions
- Mandatory climate-related reporting in Australia: What directors need to focus on in FY2026
- Getting started in Sustainable Business Planning: Key concepts for planning teams
- Ready to start planning sustainably? Contact us.
About the author – Sophie Schlachter, Sustainability Advisor
Sophie holds a Master of Sustainability from the University of Sydney and has worked across regenerative agriculture and waste management sectors, including for OzHarvest and the Taronga Zoo Conservation Society. Sophie is experienced in business and sustainability analytics, and is passionate about enabling sustainable business that balances profit with positive environmental and social outcomes.
Better Planning. Better Planet.