Navigating Australia's New Sustainability Reporting Landscape

The key consideration is that AASB S2 climate-related disclosures operate at the entity level, not at the individual facility level. Reporting boundaries should align with those used in the entity's general purpose financial statements, as sustainability disclosures are submitted alongside financial reporting.

As a result, organizations should assess and report on all facilities and operations within the reporting boundary of the entity, rather than only those that meet the NGER threshold. There may be exceptions where a facility falls outside the reporting entity due to differences in ownership or organizational structure, but in general, climate disclosures should reflect the full reporting entity.

Achieving reasonable assurance requires:

• Extensive evidence gathering
• Detailed testing of data and transactions
• Assessment of internal controls
• Review of underlying processes and systems
• Greater scrutiny of how information has been prepared and reported

Limited assurance provides a lower level of assurance and results in a negative conclusion. Rather than confirming that the information is free from material misstatement, the practitioner states that nothing has come to their attention that would indicate a material misstatement.

Limited assurance typically involves:

• Management inquiries
• Analytical reviews
• Assessment of whether required disclosures have been made in accordance with the standard

For Scope 3 emissions, limited assurance recognizes the practical challenges of collecting and validating data across complex value chains. Given the reliance on supplier and third-party information, the assurance procedures are generally less extensive than those required for reasonable assurance.

The GHG Protocol does not appear to provide detailed methodologies for complex oil and gas operations. The GHG Protocol provides the overarching framework for GHG accounting, but it does not prescribe detailed methodologies for every industry-specific scenario. This can present challenges for sectors such as oil and gas, where operations are often complex and involve unique emissions sources.

For organizations in the oil and gas sector, the most appropriate approach will depend on their reporting obligations. While many companies will use the GHG Protocol as the foundation for their emissions accounting, organizations that are required to report under NGER Scheme may apply the methodologies specified under the NGER framework.

One of the key differences between the ASRS and many other sustainability frameworks is the perspective from which reporting is undertaken. Many sustainability reporting frameworks focus on a company's impact on society and the environment. In contrast, ASRS focuses on how climate-related risks and opportunities affect the organization itself, particularly its financial performance, strategy and future prospects.

ASRS is designed to provide investors and capital providers with decision-useful information about:

• Climate-related risks and opportunities
• The potential financial impacts of those risks and opportunities
• How climate considerations are incorporated into strategy and risk management
• An organization's climate-related metrics, targets and transition plans

As a result, ASRS takes a more financially focused and investor-oriented approach than many traditional sustainability reporting frameworks.

There is no requirement to achieve a specific year-on-year emissions reduction, such as a mandatory 5% annual decrease. In that sense, simply disclosing your emissions and climate-related targets can satisfy the basic reporting requirement.

However, ASRS is not a "set-and-forget" exercise. Organizations are also expected to explain:

• How they plan to achieve any climate-related targets they have disclosed
• The capital and resources being allocated to address climate-related risks and opportunities
• Their performance and progress against each climate-related target over time

The key takeaway is that while organizations are not required to meet predetermined reduction rates, they should be prepared to demonstrate that they are taking meaningful and proactive steps toward achieving their stated targets.

Yes. Organizations should initially focus on Scope 1 and Scope 2 emissions, as these are generally easier to identify, measure and manage. However, it is important not to delay planning for Scope 3 emissions, as they are often the most complex and resource-intensive aspect of climate reporting. A practical starting point is to conduct a value chain assessment to identify potential emissions hotspots and determine which Scope 3 categories are likely to be most material to the business.