Reporting For Duties: ESG Reporting in Australia - ASRS: Metrics & targets pillar

Tim Stutt, Anna Coroneo and Isabella Kelly delve into the integration of sustainability reports into annual reports, exploring the challenges and strategies for clear and effective climate-related disclosures. They cover a broad spectrum of topics including the potential for ASIC relief applications, complexities of cross-referencing and implications of the modified liability regime. They share insights from the latest ASIC sustainability guidance released in March 2025 and practical tips for ensuring compliance and effective communication in your sustainability reporting. 

In our first episode of The Third Wheel for 2025, Tim Stutt, Anna Coroneo and Suzannah Hewson explore the key themes and latest trends in climate and sustainability reporting both globally and in Australia. They offer practical advice for companies preparing for new regulatory requirements and conducting climate reporting readiness initiatives, including gaps analysis, data management, and stakeholder engagement. They also explore broader ESG issues, such as integrating ESG into risk management and procurement processes, and the future of nature-related reporting. 

In the final episode of The Third Wheel for 2024, Tim Stutt and Mel Debenham reflect on the year’s ESG developments and look ahead to 2025. They discuss the recent governmental response to the statutory review of the Modern Slavery Act 2018 (Cth); the winding path of nature positive reforms in Australia; preparations ahead of the first year of reporting under the new climate reporting regime; and the growing focus on nature-related disclosures. The episode closes with their thoughts on a possible pendulum swing towards greater scrutiny of proposed ESG regulations moving forward, as regulatory fatigue sets in and having regard to changes in sentiment locally and abroad.

Climate-related metrics and targets are already a key area of focus for stakeholders, but under the new regime there will be more granularity than has been disclosed in the past.The ASRS metrics & targets pillar requires companies to take the leap towards granular quantitative disclosures (including in relation to Scope 3 emissions). In this episode, we talk about the need for a deep understanding of the related metrics, assumptions, interim targets and contingencies and how they factor into a company’s position and prospects.

The new reporting regime will be a prompt for companies to critically assess whether existing governance arrangements are ‘fit for purpose’ (and disclosure) in respect of climate impacts, risks and opportunities.In this episode, we talk about how companies are stress-testing their governance arrangements, reconsidering the division of responsibility, board and management skill sets, and updating current governance documents (e.g. charters, agendas).

Board and management oversight of climate issues is not a new concept, but deciphering and disclosing how this occurs in practice is often a challenge.The ASRS governance pillar requires quite granular disclosures of the board and management’s role in overseeing climate-related risks and opportunities. In this episode, we talk about how to articulate accountabilities and reporting ‘flows’ within the business, in a way that will support your disclosures longer term.

Disclosure under this pillar is not just headline statements and overarching direction. These mandatory climate-related disclosures will mean that a company’s “strategy” will need to include comprehensive disclosure of how climate considerations are integrated into decision-making.The ASRS strategy pillar requires companies to focus not just on its transition plan and overarching strategic pathway for the company, but also how climate-related risks and opportunities are expected to impact on business model, financial position/performance and value chain. In this episode, we talk about the ways in which climate impacts, risks and opportunities will inform your disclosed strategy and prospects, including their linkages to planning and decision-making.

How can companies prepare for the assurance requirements when they’re still a moving target in and of themselves…?In this episode, we talk about the current proposal from the Australian Auditing and Assurance Standards Board (AUASB) for phased assurance (with consultation open until 3 May 2024). We also talk through some practical steps that companies can be taking now to prepare for assurance of climate reporting.

Board and management oversight of climate issues is not a new concept, but deciphering and disclosing how this occurs in practice is often a challenge.The ASRS governance pillar requires quite granular disclosures of the board and management’s role in overseeing climate-related risks and opportunities. In this episode, we talk about how to articulate accountabilities and reporting ‘flows’ within the business, in a way that will support your disclosures longer term.

Now legislation for Australia’s new climate reporting regime has finally been introduced into Parliament, what impact will it have for corporates?... (and when?).The new climate reporting regime is likely to require a significant uplift in corporate reporting – and will require considerable resources and effort over the next 12-18 months. This episode talks about how the regime will phase in, and how it might impact companies in practice.