With mandatory sustainability reporting now a reality for many Australian organisations, one of the most common questions we hear is simple: where do you actually start?
For many boards and finance teams, sustainability reporting feels unfamiliar, complex and resource intensive. While the regulatory requirements are new, the journey does not need to be overwhelming if approached in a structured and practical way.
Step 1: Take a Stocktake
The first and most important step is to understand where your organisation currently stands. Sustainability reporting is rarely a greenfield exercise. Most organisations are already addressing elements of governance, strategy, risk management, metrics and targets — either explicitly or implicitly.
A stocktake should assess:
- What climate related risks and opportunities you already address in your risk management processes and strategy
- How your board already considered climate-related risks and opportunities
- What data is already being collected
- The level of knowledge and experience at both management and board level
This exercise provides a clear snapshot of current maturity and highlights gaps that will need to be addressed before reporting begins.
Step 2: Determine Your Best Practice Appetite
Sustainability reporting standards largely require organisations to disclose what they do, rather than mandating what they must do. This creates a broad spectrum between minimum compliance and best practice.
Determining where your organisation wants to sit on this spectrum is a strategic, board level discussion. Sustainability reports are public documents and will be scrutinised by a wide range of stakeholders including investors, customers, suppliers, employees and regulators.Your chosen position, whether compliance focused or more aspirational, will directly influence the scope, complexity and resourcing of your sustainability reporting project. The earlier this decision is made, the more efficiently the project can be designed.
Step 3: Focus on the Minimum Project Requirements
Regardless of your orgnaisation’s best practice aspirations, there are four foundational projects that every organisation will need to implement as part of their sustainability reporting journey.
- Climate Risk and Opportunity Assessment
This is the fundamental driver of all sustainability disclosures. As all disclosures in your sustainability report must relate to those climate-related risks and opportunities that could be reasonably expected to impact your organisation. Therefore, an essential starting project is for organisations to identify those material climate related risks and opportunities, considering both physical and transition risks. This will best be achieved by involving people from across the business in making that assessment. - Establish a Greenhouse Gas (GHG) Accounting System
GHG emissions disclosures require entirely new data collection systems. Scope 1 and Scope 2 emissions are mandatory from year one, with Scope 3 following later due to its complexity. This doesn’t mean you should defer commencement of the project. Starting early allows time to test data quality, identify gaps and refine processes. - Scenario Analysis
A mandatory disclosure requirements, organisations must assess how their business performs under different climate scenarios, including a 1.5°C scenario and one that well exceeds 2°C. Scenario analysis does not need to be fully re performed every year, although it must be reported each period and is best aligned with strategic planning cycle every 3 – 5 years. This is something that you should think about getting ready now ahead of time if possible, especially if you are about to engage in another round of strategic planning. - Audit Readiness
All sustainability disclosures are subject to assurance. Clear documentation of assumptions, estimates and judgements is critical. Building audit ready documentation from day one is significantly easier than trying to reconstruct it later, particularly as assurance requirements increase over time. It is important that you have information to support all you positions and provide them to auditors as information requests from auditors are likely to be less specific than you may be used to from financial statement auditors due to the lack of maturity in sustainability reporting.
Why Starting Now Matters
It will be extremely challenging to try and implement sustainability reporting retrospectively. Systems, processes and data collection need to be in place during the reporting period itself to ensure a smooth reporting process. Starting early also helps organisations manage competing demands, particularly as significant changes to financial reporting standards are on the horizon with AASB 18 Presentation of Financial Statements.
Importantly, sustainability reporting is a legislated requirement under the Corporations Act. Directors and professionals have personal obligations, and while regulators have indicated a pragmatic approach during the transition, a failure to engage with the requirements carries real risk.
The Key Takeaway
Sustainability reporting is a journey, not a one-off exercise. Organisations that take a structured approach, starting with a stocktake, setting their ambition early, and investing in the four minimum projects, will be far better positioned to meet their obligations confidently and efficiently.
The message is clear: whether you are just getting started or already on the path, now is the time to act.
Moore Australia can help you get started. We can undertake a gap analysis with you which will help you to understand where you are currently at with mandatory projects along with an indication of your current status on the best practice spectrum. The report will also help to indicate the knowledge and capacity of both staff and board members to deal with the new sustainability reporting requirements. It can be a really useful way to kick start your sustainability reporting journey and setting you up for success. For further information please contact your local Moore Australia advisor.
