5 mins read
Published Jun 2, 2025
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The Australian Sustainability Reporting Standards (ASRS) Compliance Checklist (What To Do Now)
Australia’s climate‑related financial reporting framework is now in force. The Australian Sustainability Reporting Standards (ASRS), based on AASB S1 and AASB S2, introduced mandatory disclosure of climate‑related risks and greenhouse‑gas emissions for large entities.
The mandatory climate disclosures under Australia’s new sustainability reporting standards (ASRS) will initially apply only to entities above specific size thresholds. Large listed entities and financial institutions must report Scope 1, 2 and 3 emissions and directors are required to sign off on these disclosures, meaning the market will begin to assess their climate performance alongside their financial results.
Organisations without a clear plan risk penalties, reputational damage and potentially higher borrowing costs. However, small and medium‑sized businesses that do not meet the turnover, asset or employee thresholds set by the ASRS will not need to produce full climate reports in the early phases of the regime; their only obligations will be to provide data to their large customers as part of those customers’ Scope 3 reporting.
This phased approach is designed to minimise the burden on smaller companies while ensuring that the largest emitters begin disclosing first.
Starting early, building a robust data foundation and assigning clear accountability will reduce stress and position businesses to attract investment.
Implications – Why data and systems matter
Governance and accountability: Boards will need to understand climate risks well enough to sign off on reports. Clear ownership and a cross‑functional project team (finance, sustainability, operations, IT and risk) will be essential.
Data management: Manual spreadsheets and ad‑hoc data collection will not stand up to audit scrutiny. A digital platform that connects energy meters, IoT sensors, supplier data and other inputs will save time and reduce errors.
Scope 3 challenges: Supplier emissions data can be hard to obtain. Early engagement with key suppliers and the use of standardised methods will help avoid last‑minute gaps.
Cost of delay: Waiting until the reporting deadline could lead to rushed disclosures, higher consultancy fees and penalties for non‑compliance. Investors, insurers and customers are already looking for verified climate data; companies that can provide it stand to gain.
ASRS Compliance Checklist
For a concise summary, here’s a checklist of actionable steps to kickstart your ASRS compliance pathway:
Perform a Compliance Gap Analysis: Review ASRS (AASB S2) requirements vs. your current reporting. Identify missing data, processes, and competencies.
Determine Your Timeline: Confirm when your first sustainability report is due, based on company size thresholds. Use this to set internal deadlines (e.g. have a draft report 3 months before annual report).
Establish Governance: Assign clear ownership for climate reporting. Educate your board and executives on their responsibilities and the upcoming disclosures. Set up a cross-functional team (finance, sustainability, operations, IT, risk) to drive the project.
Invest in Systems: Choose and implement a digital platform for sustainability data. Integrate key data sources (energy, travel, supply chain, etc.) into the system. Automate data flows wherever possible to replace spreadsheets.
Gather Data & Calculate Emissions: Start collecting 2024 data as if you were reporting now. Ensure you can calculate Scope 1 and 2 accurately, and initiate engagement with suppliers for Scope 3 data. Use standardised methods and document everything.
Quality Control: Put in place data validation checks. Run internal audits on sample data. Fix data issues (e.g. missing info from a business unit) sooner rather than later.
Draft and Iterate: Don’t wait until the due date – attempt a draft sustainability report early. This could be a simplified “trial run” report using available data. Use it to identify any narrative gaps (e.g. do you have a clear climate strategy to disclose? if not, develop one).
Seek Expert Help if Needed: If certain aspects feel daunting – for example, scenario analysis or complex Scope 3 accounting – consider bringing in consultants or using advisory services to guide you through. The cost of getting it wrong (penalties, restatements, or reputation damage) will far outweigh the cost of expert advice now. ASIC has indicated it will take a reasonable approach initially, but companies are expected to be actively working toward compliance.
Following this checklist builds momentum and a structured approach to tackle ASRS obligations methodically. ASIC has indicated it will be pragmatic initially but expects companies to be actively working toward full compliance.
Conclusion – Act now to reduce risk
The ASRS regime represents a step change in corporate reporting. It requires new data, processes and board oversight, but it also presents an opportunity: verified sustainability data can reduce costs, build trust and unlock finance.
If you’re starting your ASRS journey and want to see how a digital platform can simplify data capture, validation and reporting, book a discovery call with us.
We’ll show you how Carbon Central connects your systems, structures your emissions data and prepares audit‑ready reports.
