A Complete Guide to Australian Sustainability Reporting Standards and Their Impact

1. A Complete Guide to Australian Sustainability Reporting Standards and Their Impact As Australia steps into a new era of climate accountability, the Australian Sustainability Reporting Standards (ASRS standards) have emerged as a key regulatory framework shaping how companies disclose sustainability-related financial and non-financial information. Introduced by the Australian Accounting Standards Board (AASB) and aligned with the International Sustainability Standards Board (ISSB), these new standards aim to enhance transparency, comparability, and accountability across the corporate landscape. Who Is Affected by the ASRS Standards? Initially, the ASRS standards will apply to large, listed entities and financial institutions, with phased implementation expected to begin from 1 July 2024. The Australian Treasury has proposed a three-tiered compliance schedule, prioritising entities with consolidated revenue of over $500 million. Over time, smaller entities with significant market influence will also fall within the scope. This includes businesses in high-emission sectors such as mining, energy, and manufacturing, which are likely to be early targets for scrutiny.

2. Importantly, subsidiaries and supply chains that support these large entities must prepare for increased data requests and assurance obligations. This ripple effect means even companies not directly subject to the ASRS may need to align their internal reporting processes with the new standards to maintain business relationships. In the long term, aligning with these expectations could become a prerequisite for financing, procurement eligibility, and corporate partnerships. Mandatory Disclosures and Key Requirements Under the proposed framework, reporting entities will be required to: ● Disclose material information about climate-related risks and opportunities that could impact enterprise value. ● Describe the governance structures overseeing sustainability and climate risks. ● Explain how climate-related risks are integrated into the company’s overall strategy and risk management framework. ● Provide quantitative metrics such as emissions data (Scopes 1, 2, and 3), financed emissions, and climate scenario analysis outcomes. Importantly, these disclosures must be integrated into the general purpose financial report and meet assurance requirements aligned with Australian Auditing and Assurance Standards Board (AUASB) guidance. How ASRS Standards Shape Corporate Strategy Beyond compliance, the ASRS standards encourage organisations to take a proactive approach to sustainability. By embedding sustainability-related risks and opportunities into enterprise strategy, companies can better identify areas for innovation, reduce long-term costs, and enhance stakeholder trust. These standards promote forward-thinking decision-making by requiring firms to consider the financial materiality of climate and environmental factors. As a result, sustainability becomes integrated into long-range planning, rather than being treated as a peripheral obligation. Additionally, the new requirements compel companies to reassess their internal data systems, improve cross-department collaboration, and invest in sustainability reporting software capable of capturing granular, audit-ready information. Finance and legal operations must now work in alignment to ensure reporting is both accurate and strategically actionable. This shift transforms

3. sustainability reporting from a reactive exercise into a core business discipline that informs boardroom decisions and investor communications. Looking Ahead: Preparing for ASRS Implementation As the ASRS standards move closer to formal adoption, companies should evaluate their current sustainability disclosures, identify any gaps, and engage cross-functional teams to build reporting readiness. A well-planned transition will ensure smoother assurance processes and stronger alignment with investor expectations. Early engagement with auditors, legal teams, and sustainability consultants can also help organisations clarify scope, timelines, and technical interpretation of disclosure requirements. The ASRS will reshape Australia’s sustainability landscape by establishing uniform disclosure practices and elevating climate transparency to the same level of importance as financial reporting. In addition, investing in robust data governance systems and sustainability reporting software will be critical for capturing, verifying, and disclosing high-quality, audit-ready data. By acting now, companies can stay ahead of regulatory timelines, mitigate compliance risks, and position themselves as leaders in corporate responsibility.