From compliance to advantage: the Australian Sustainability Reporting Standards and how Ramboll can assist your company

The time for Australia’s largest companies to produce climate-related financial disclosures (CRFD) is here. Under the Australian Sustainability Reporting Standards (ASRS), mandatory climate disclosures go further than reporting GHG emissions under the National Greenhouse and Energy Reporting (NGER) Scheme. Companies must disclose risk and opportunity information for their operations relating to climate change and the transition to a low-carbon economy. This is now a requirement under the Corporations Act 2001 and is treated with equivalent weighting as financial reporting obligations. By 2027, all companies with more than $50 million revenue or assets, and 100 or more full time employees, will need to do so.

This article breaks down the ASRS, what is required, who is obligated and when companies need to disclose. It also describes the benefits, challenges, and how Ramboll can help you prepare.

Who is obligated and when do companies need to disclose?

Under the Corporations Act 2001, Australian entities are required to submit climate-related disclosures if they meet the criteria in Table 1. The reporting will be phased in over three years, starting from January 1^st 2025 for Group 1 companies, 1^st July 2026 for Group 2, and 1^st July 2027 for Group 3 (see Table 1).

The climate disclosure is prepared alongside the entity’s financial statements and must be released at the same time. Company directors are the ones responsible for declarations that the sustainability or climate statement is true and complies with the ASRS.

The remit of AASB S2 applies to:

• Public companies (companies that can offer its shares to the public and has no limit on the number of members);
• Proprietary companies (companies with limited shares or shares that are not available to the public); or
• Disclosing entities (a company that is listed on an Australia financial market or has issued enhanced disclosure securities (such as shares or debentures)).

What is required to be disclosed?

Administered by the Australian Accounting Standards Board (ASSB), the ASRS consists of two standards, AASB S1, General Requirements for Disclosure of Sustainability-related Financial Information, and AASB S2, Climate-related disclosures. Both standards use the core four pillars of the Task Force on Climate-related Financial Disclosures (TCFD) framework: governance, strategy, risk management, and metrics and targets to guide the disclosing of relevant information (see Figure 1):

• AASB S1, General Requirements for Disclosure of Sustainability-related Financial Information – This standard is voluntary. AASB S1 outlines the general requirements for an entity to disclose information about its sustainability-related risks and opportunities. It is based on IFRS S1, General Requirements for Disclosure of Sustainability-related Financial Information by the ISSB.
• AASB S2, Climate-related Disclosures – This is mandatory under the Corporations Act 2001 and must be completed alongside an entity’s financial reporting. AASB S2, also known as climate-related financial disclosures (CRFD), sets out the general requirements for an entity to disclose information about its climate-related risks and opportunities. It is based on IFRS S2, Climate-related Disclosures.¹
• The ASRS uses a single materiality approach, which considers only how sustainability and climate issues impact a company’s financial performance and value. In contrast, other global frameworks, such as the Corporate Sustainability Reporting Directive (CSRD) in the European Union, use double materiality.²

What are the benefits of implementing the ASRS?

While disclosing climate-related information is mandatory, entities that disclose climate and sustainability information in line with the ASRS gain an advantage from several benefits, including:

• Building resilience: A tangible benefit of understanding climate risks and opportunities is future proofing and building resilience, giving entities competitive advantages, especially in supply-chain-critical industries like agriculture, infrastructure, and manufacturing. Climate resilience allows for faster recovery from disruptions, allowing companies to capture market share where competitors struggle and even increase cost savings (see Table 4). By shifting financial flows to understanding climate risks and opportunities, an entity enhances performance, reduces systemic risks, and future proofs its operations.

• Transparency and accountability: Disclosing under the ASRS enhances the transparency and accountability of an entity by building trust among stakeholders. By publicly sharing the risks and opportunities faced, stakeholders can make more informed decisions, risk mitigation is improved and brand reputation boosted.
• Attracting investors: The ASRS are highly standardised and aligned with global practices, making it attractive to investors seeking responsible and sustainable business practices in their portfolio. This could lead to increased access to capital and future-proofing the business.
• Enhancing stakeholder engagement: Comprehensive reporting under the ASRS fosters better communication with employees, customers, suppliers, communities, and industry groups. Employees may prefer working for companies leading sustainable practices, customers benefit from supply chain transparency, and communities prefer responsible and sustainable practices in their vicinity.

How are the ASRS being phased in?

The ASRS are being introduced for large companies over the next three years using a phasing system. The date that companies must comply depends on financial criteria and NGER obligations. However, the extent of information covered in disclosures is also being phased in by requiring more detail as time goes on. As shown in Table 2, in year 1, some topics can be disclosed with no assurance, some disclosed with limited assurance, and Scope 3 (supply chain) emissions are optional. In years 2 and 3, all topics are included with limited assurance, and by year 4, all disclosures must have reasonable assurance.

What are the challenges of implementing the ASRS and how can Ramboll help you?

Data availability and quality
The data required for climate scenario analyses can be complex. This includes:

• Physical climate data – historical climate records, (temperature, precipitation, wind speed, humidity, sea levels and extreme events (droughts, cyclones)), climate projections (IPCC 1.5 or 2˚C), and hazard data (flood maps, bushfire risk zones, and extreme temperature areas).
• Asset and exposure data - infrastructure/facility details (location, design, age, condition, and capacity), geospatial data (elevation, land use, proximity to hazards), and supply chain info (supplier locations and logistics routes).
• Operational and performance data – Historical asset performance or service reliability (asset failures or service disruption linked to weather and climate events) and stakeholder data (community well-being indicators, local knowledge, engagement).

Complexity of relevant assessments

Under the ASRS, complex assessments such as scenario analysis, transition plans and GHG inventories are required to determine risks and opportunities that are material to the entity. They can be challenging without professional assistance:

• Scenario analysis and modelling – Climate scenario modelling uses “what-if” analyses with plausible future climate conditions. These analyses require an internal modelling capacity and access to regional scenario datasets.
• Transition plans – Companies may struggle to translate high-level commitments into measurable and feasible targets with necessary budgets, defined governance roles, and risk management systems.
• GHG inventories – Producing GHG inventories requires a level of expertise in carbon accounting and includes collecting energy and vehicle activity data and calculating the associated carbon footprint.

Ramboll has built a world-class physical risk modelling program, HazAtlas. We understand that physical and transition climate risk varies across all companies and can leverage our global climate expertise to assess the risk profiles of your specific assets and value chain. Our global team of climate specialists, engineers, and management consultants help address the risks and opportunities considered in the development of transition plans. We are also global leaders in carbon accounting and have created GHG inventories for some of the worlds largest companies, helping them manage their carbon footprint, set targets, and plan strategically.

Governance and accountability gaps

Beyond data and assessments, companies face significant challenges in obtaining internal buy-in and effectively integrating climate risks and opportunities into decision-making, strategy, and business models. Boards and stakeholders may lack familiarity with the level of effort required and must proactively engage in board involvement and risk management processes.

The ASRS mandates that a company disclose how it integrates climate considerations into mainstream risk management, rather than treating them as standalone issues. Companies that do not have documented processes for managing climate risks and opportunities—such as corporate risk registers that account for long-term climate horizons or mappings between physical risks and asset-level exposure—may encounter difficulties in disclosing.

We can support clients with this through our experience of reporting against global sustainability frameworks for companies across several sectors. We know the challenges of integrating climate change into decision-making and can assist to strengthen your company’s ability to do so. Contact our experts to find out more.

How can Ramboll support your business?

Ramboll's comprehensive suite of services, including climate risk assessments, compliance, strategy development, GHG accounting, data analysis, training, and stakeholder engagement, positions companies to effectively meet their climate-related disclosure requirements under the ASRS. By leveraging Ramboll's expertise, businesses can not only ensure regulatory compliance but also enhance their sustainability practices, demonstrating their commitment to addressing climate change and promoting transparency in their operations.

World Class Integrated Expertise

Ramboll can draw upon the depth and breadth of 18,500 specialists combining energy, environment and health, transport, water, and business expertise across markets and geographies. This provides us with the necessary vision and skillset to guide our clients on a successful transition to sustainability-focused businesses, portfolios, assets and supply chains.

Physical and Transitional Climate and Nature-related Risk

Ramboll has financial and technical expertise in climate risk to provide forward-thinking integrated advice for strategic management and financial planning.

Expert Carbon Accounting Support

Ramboll has a long history of calculating and accounting for the climate impact of products and businesses and provides services within a variety of climate change accounting systems and frameworks.

Bespoke Advisory Services

We tailor our approach to each client, its aspirations and context. As trusted advisors, we strive to fully understand what drives your organization and its operations to be able to provide solutions to the most pressing challenges.

References:

_{[1] It should be noted that AASB S2, which requires disclosures on GHG emissions, does not supersede the National Greenhouse and Energy Reporting (NGER) scheme. Companies that are obligated to report under NGER must continue to do so. Additionally, NGER reporters that reach the NGER Corporate Threshold (>50,000 tCO2e) must also disclose their climate-related information under AASB S2, even if they do not meet the financial criteria (see Table 1).}

_{[2] Double materiality adopts a broader perspective by also considering impact materiality, which assesses how the company’s operations impact the environment and society. Both the ASRS and CSRD require GHG disclosures, which, in the climate context, affect the risk of impact. However, the ASRS uses GHG emissions as a proxy for carbon risk exposure to financial performance, whereas CSRD mandates more detailed GHG disclosures and employs them as an impact metric, regardless of financial materiality.}

_{[i] Systemiq, 2025, Returns on Resilience and Adaptation: Driving Growth, Stability and Competitiveness, page 7, via: https://www.systemiq.earth/wp-content/uploads/2025/08/Returns-on-resilience_2025.pdf?}

_{[ii] Ceres, 2025, Investing in Resilience: Three Case Studies in Climate Adaptation, page. 6, via: https://www.ceres.org/download/6c960763-6a1d-4dbb-9da8-2b558561a773?utm_}

_{[iii] Elliot Wood, adapt unbound, 2025, 10 Climate Adaptation and Resilience Case Studies from Around the World, via: https://www.adaptunbound.com/library/10-climate-adaptation-and-resilience-case-studies}

_{[iv] Christer Tryggestad/Martin Neubert, 2020, “Ørsted’s renewable-energy transformation”, McKinsey Sustainability, via: https://www.mckinsey.com/capabilities/sustainability/our-insights/orsteds-renewable-energy-transformation?utm_}