How to prepare for mandatory climate reporting

Mandatory climate-related financial disclosures are nearly here. In response, climate change and NetZero have become some of 2025’s highest priorities - 31% of corporate leaders we spoke to in a recent Talent Nation survey said this is their top priority for the coming financial year, followed by 18% who highlighted mandatory reporting specifically.

But, competing business priorities, access to quality data and a very limited talent pool are proving significant challenges, a problem only set to get more difficult as we approach ASIC's regulatory deadlines.

So, in this guide, we will examine some of the new requirements and discuss how to prepare your organisation to meet the climate reporting standards of the future.

New reporting standards summarised

From January 1, 2025, thousands of Australian business entities will need to prepare annual climate-related financial disclosures, considered the “biggest changes to financial reporting and disclosure standards in a generation,” according to ASIC chair Joe Longo.

While many large organisations are already used to producing similar reports, the new standards will require smaller organisations to prioritise climate impacts like never before. This brings Australia in line with other jurisdictions such as the EU, the UK, New Zealand and Japan, and should also serve to make Australia a more attractive destination for international investment.

What must these reports include?

• A statement which includes notes on climate-related governance, strategy, risk management, and metrics and targets.
• The financial impacts of climate-related risks and opportunities, plus anticipated future impact over time.
• An analysis on climate resilience, as assessed under at least two possible future states: an increase in global average temperatures of 1.5 degrees C above pre-industrial levels, and for temperatures which “well exceed” 2 degrees C.

This is a highly simplified summary. For more information on the inclusions of the new reporting standards, see ASIC’s press release here.

Who it will impact, and when it begins

The first annual reporting period begins on January 1, 2025, and includes ASIC’s ‘Group 1’ entities, that is, Australia’s largest organisations (see below).

For Group 2, medium-sized entities, the reporting period begins on or after July 1, 2026, and smaller entities (Group 3) must begin reporting on or after July 1, 2027.

That means the first reports for Group 1 should be lodged by March-April 2026, or September-October 2026, depending on your organisation’s situation and structure.

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The challenge of new mandatory climate reporting

Our recent remuneration report highlighted a number of challenges that Australian organisations expect to face in the coming 12 months as they prepare for mandatory climate-related financial reporting.

• Insufficient in-house expertise: Hiring and retention of talent was listed as one of the top challenges of FY24 as the need for specialist ESG expertise increases. There is only a very limited talent pool in Australia, and course curricula cannot keep pace with the changes. Plus, with over 6,000 companies required to report under the new regime, the shortage in ESG reporting and analytics talent will only get more severe.
• Limited supply of consultants: Consultancies have been a solution for organisations in the past, often used by NGER-reporting entities to lead reporting or change management projects. But they have also been a source of talent for clients, with consultants being lured away from their firms into in-house teams. At the same time, demand for consultancies remains strong, and getting stronger. Our partners in the industry tell us they are already booked out for a year, and many expect to struggle to keep up with demand through to 2030.
• Strained data collation resources: Climate reporting requires data to be collated and interrogated, and the accuracy and integrity of this information is proving difficult. Of the over 1,800 individuals surveyed in our report, 63% stated that their organisation was ready for the changes, however only 25% currently utilise a dedicated ESG platform. Nearly half collate their information manually using spreadsheets. Given the increased complexity expected when the new regime begins, this will place additional strain on already stretched resources.
• Competing business priorities: In the context of current economic uncertainty and global volatility, ESG and climate have been deprioritised, delaying preparations for mandatory climate reporting. While it's completely understandable that organisations have shifted focus to business continuity, the time to meet new compliance obligations is quickly running out and that means pressure is building.

Learn more: See our previous Remuneration Report for 2023-24

How to prepare for mandatory climate reporting

It’s critical that you assess your capabilities in the lead-up to the reporting deadlines and note any gaps in internal expertise or technology. Acting sooner rather than later will help to ensure that you are prepared for the changes, have access to the required data, and that you are not hamstrung at the last minute competing for limited ESG talent.

We spoke to several of our clients, and they said these were top of mind:

1. Know what you’re on the hook for

Ensure your team is clear on the dates and requirements relevant to your organisation, taking into account your size and status – as this will impact your deadline.

Next, consider who needs to be involved within your company. Under the new standards, certain individuals may be required to provide commentary on climate-related topics to which they have not previously been exposed (such as the board and management).

Consider what information you will need to gather, and how you will acquire that information. It’s likely that your organisation will have to procure new systems, processes or people to fulfil its obligations, and to train existing teams.

Additionally, some relief may become available to certain entities to help ease them into reporting, or to defer it until later. ASIC has advised any entity seeking relief to apply as soon as possible, in case it takes a long time to resolve.

2. Audit your current climate literacy

You can’t prepare for what you don’t understand.

Take time now to audit the skills available within your organisation in relation to ESG and climate to understand where your gaps are. Assess whether you have the capability in-house (looking at your finance, legal and risk teams), and determine if you need to add subject matter experts to the team, or to hire consultants to fill holes.

Consider also training and upskilling. If you act early, you have an opportunity to leverage the transferable skills within other internal teams, and to educate the business around what information will be required – and the consequences for failing to meet obligations.

Remember, if you opt to use a consulting firm to supplement your internal teams, many are already booked out for 12 months and you will need to factor this into your project timelines.

3. Recruit now, not later

Even if your reporting period does not start until much later, getting on top of talent requirements now will allow you to prepare your organisation without struggling to compete at the last minute.

Remember, consulting firms are unlikely to be readily available. To guarantee that your organisation is capable of meeting its requirements, consider prioritising the acquisition of new ESG and climate talent instead. Even part-time or temporary resources will enable you to begin preparations while you source a long-term solution.

If you need help navigating the complexities of recruitment in this sector, give our team a call and let’s discuss your needs.

4. Focus on the benefits

We know that competing business priorities are a major challenge for Australian entities, and that climate reporting has not historically been viewed as a financial priority. The new standards require a change in mindset among finance teams and other business leaders, and it may help to view these new requirements through the lens of their potential opportunities.

In Europe, for example, under similar climate reporting legislation, PwC found that companies saw the biggest benefits as:

1.????? Better environmental performance

2.????? Improvement stakeholder engagement

3.????? Mitigation of risk

4.????? Better social performance

5.????? More effective corporate governance

A separate ESG survey by PwC also found that investors are driving climate reporting, 70% of whom continue to advocate for the integration of sustainability into corporate strategy.

If you are finding it difficult to shift focus to climate reporting, pitching the benefits (in addition to the consequences) may improve buy-in among other leaders.

How to compete for ESG talent as a smaller entity

Finding top ESG talent is a challenge even for Australia’s largest corporations, and smaller businesses are competing for the same limited talent pool. We understand it may seem impossible to lure the best people away from these larger entities, but with thoughtful job design and careful strategic planning it can be done.

Some tips to consider include:

1.????? Act now. Your smaller structure will likely afford you greater agility and speed compared to larger, slower-moving enterprises. If you act now, you may be able to find and attract top talent before your competitors have had a chance to ramp up their hiring plans.

2.????? Focus on your employee value proposition. Consider what your company can offer to improve its appeal compared to peers. You may not be able to compete on salary, but you can ensure that your workplace is a challenging and satisfying place to work, that your culture promotes collaboration and positivity, and that you offer an array of valuable non-cash benefits.

3.????? Leverage additional expertise. If you do not have the in-house experience to identify and recruit highly qualified, right-fit sustainability talent, talk to a specialist team like Talent Nation for assistance.

At Talent Nation, we’ve spent years building a reputation for quality and efficiency, building one of the most sophisticated networks of ESG professionals in the ANZ region. We know how to access the best talent from within the region and beyond, and can guide you on structuring your team, establishing competitive pay rates and setting a candidate up for long-term success.

No matter the size of your organisation, now is the perfect time to prepare for mandatory climate reporting. Learn more about how the Talent Nation team can assist you by clicking here, or reach out to us today to discuss how the new requirements may impact your business.