With FY25 financial results (largely) in the bag, year 1 reporters need to start their run to the finish line for mandatory climate reporting. If you’ve been following our thought leadership series, you will have understood the critical actions, be starting with the end in mind and developed a strategy to engage your auditors. Like a number of our clients, you’re exploring how scenario analysis can help inform your risk and opportunity assessments and allied financial quantification and be thinking about how to talk about your transition plans. If you’ve not made much progress yet, the run to the finish line is going to look like a sprint. But there is still time if you can structure and organise efficiently. Either way, you’re probably wondering how you’re going to complete all the tasks, particularly given the short timeframes and widespread budgetary pressures. In this article we share with you some of recent experience with clients: 

  • If you’ve got some building blocks already, start with a deep dive on known gaps. National Greenhouse Gas and Energy Reporting Scheme (NGER) and Safeguard Mechanism have prompted many Australian organisations to get quite mature around their emissions quantification and decarbonisation roadmaps. So, a comprehensive gap analysis may be an unnecessary delay in mobilising the program. To rapidly transition into execution, consider task-level diagnostics (possibly in parallel with a wider review): 
  • In some cases, Australian operations of multinational organisations can barely register in their parent’s climate assessments and plans. Checking alignment of how Australian and global assets operate is essential to a decision on how to downscale. 
  • Many organisations have weather and energy cost driven risks in their register already, but haven’t made the leap to climate risk assessment. We’re currently working with an infrastructure operator to pair a rapid review of existing risk assessments with a targeted uplift program to get risks ASRS-aligned and audit ready. 
  • Some organisations’ existing scenario analysis is merely a risk assessment, rated under different climate scenarios. But if the initial work was done well, with some targeted uplift this can be the basis of a strategic exploration of how the business model and value chain responds to different climate futures. 
  • Often there is a disconnect between committed decarbonisation actions and the climate ambitions expressed in targets – before exposing this to public scrutiny, get a targeted “critical friend” review and understand where the risks to the net zero plan sit, what can be done in the near term to shore up confidence, and be clear how to describe this in the disclosures. 
  • If you’re still close to the starting line, there are some different models we’re using with clients to produce an action plan and mobilise quickly: 
  • Condensing roadmap development and stakeholder engagement – consider the model we’re using with a major manufacturing client. Invest a day (up front) with all stakeholders, moderated by expert facilitators who know what a good program looks like. Come away with everyone aligned on their actions, clear on their dependencies and an agreed gap analysis (as a bonus).  
  • Selectively leveraging AI-enabled gap analysis development to shorten the time to planning. Noting these outputs still need to be overlaid with expert judgement and guided by experienced practitioners. 
  • Most organisations don’t have the in-house resources do it alone, but implementation doesn’t have to look like a huge team of consultants or hiring a big team. We’re seeing a mixed model being used to create maximum leverage: 
  • With some of our mining clients we’ve engaged in 'co-development' – they still own and drive the program but reach out to us for more technical uplift or validation work under a framework agreement. This balances way technical rigour and budget and provides scope for internal upskilling. 
  • For a number of government agencies we’ve been playing a coaching role for the teams drafting the reports, providing a “critical friend” review on draft disclosures and helping to digest the nuances of the standards. 
  • For a large asset management client, we’ve got one of our consultants on a secondment to work alongside their team, uplifting capability and ensuring a critical element of their program is successfully delivered. 

Sunset view of a city skyline featuring modern skyscrapers and historic buildings, with vibrant colors illuminating the horizon.

Given the importance and high profile of this work, your disclosure program requires exec level sponsorship, ideally cross-functionally across finance, risk and sustainability. Increasingly, we’re seeing this being led out of finance, these teams need to get comfortable using a new group of specialists to augment their understanding of climate and its impacts on financial performance. 

Based on what we're seeing across ASRS approaches, it's clear that success hinges not just on data, but on how well organisations are operationalising. ERM's client experience shows that those who are taking an integrated approach to ASRS (rather than trying to run it as a standalone compliance exercise) are getting the insights and buy-in they need to navigate year-1 disclosure and set themselves up for success. 

For a free discovery session to explore how we can help make your ASRS disclosure a success, please reach out to your ERM relationship point or our author.