Mandatory climate reporting in Australia: What we can learn from Group 1

Mandatory climate‑disclosure reporting is now well underway for Group 1 entities, with the first reports expected in the coming months. Attention is now shifting to Group 2, whose first disclosures will be due in or after January 2027.

What can we learn from Group 1?

What may feel like a future compliance task is fast becoming a near-term business priority. As we have helped numerous Group 1 companies progress their ASRS reporting, we have garnered a series of practical learnings that can support organisations as they move from planning to execution:

1. Start Early - 18 months is tight: Getting started often takes longer than expected. Securing alignment on governance arrangements, building internal processes, and gathering and validating data require substantial lead time.
2. Engage across the business: Sustainability teams cannot do this alone; Finance, Operations, HR, and Procurement must be engaged. Companies with strong cross-functional working groups achieved greater success. Late starters struggle with assurance requirements and maintaining quality control.
3. Climate risks and opportunities must be context-specific: A common misstep is the desire for global entities to maintain alignment - overlooking the critical Australian context. Global risks are a starting point, which must be tailored to reflect regional circumstances, including regional market conditions, regulatory requirements, and Australia’s distinct climate‑risk landscape.
4. Compliance is about content, not perfect segmentation: AASB S2 does not mandate a rigid disclosure layout, and there is significant overlap across some pillars. It is useful to start with a strict clause‑by‑clause mapping. This can then be refined to streamline content and avoid duplication. Integrating an index in the appendix can provide clarity of assurance by cross-referencing specific clauses where each requirement is satisfied.
5. Focus on honest baselining, clear forward‑looking intent and avoid the temptation to over‑engineer/promise: Many organisations ask whether they can disclose activities that are not yet fully implemented. Disclosure does not imply completion, and what is more important is outlining what is current, along with the expected timeframes and governance around delivering planned actions. This is especially true for transition planning, where most companies are just getting started.
6. Financial quantification is expected: Impacts on revenue, CAPEX, asset values, and other financial metrics are ultimately expected to be disclosed. However, provisions for capability, uncertainty, lack of data and capacity can be leant on in the first year of disclosure.

For more information on how SLR can work together with you, get in touch with us today.