Client Case: Sustainability Reporting

Background

The landscape of financial reporting is undergoing a pivotal transformation worldwide, with an increasing emphasis on sustainability and climate-related financial disclosures. Australia, in particular, has been at the forefront of this change, introducing mandatory ESG reporting requirements for major companies and financial institutions, slated to commence in 2024. The Australian Accounting Standards Board (AASB) has released an Exposure Draft (ED SR1) outlining the proposed Australian Sustainability Reporting Standards (ASRS), focusing on climate-related financial information. These developments reflect Australia’s commitment to align with global standards and support the government’s pledge to achieve net-zero emissions by 2050.

Challenge

The introduction of ASRS and mandatory ESG reporting represents a significant shift for financial institutions, requiring them to establish robust governance processes and controls for sustainability-related disclosures. The challenge for these organizations is twofold: understanding the complex requirements of the new standards and implementing them in a way that integrates sustainability with financial reporting. This transition not only demands a comprehensive assessment of current compliance levels but also necessitates strategic planning and training for teams to effectively manage climate-related financial disclosures.

Our Solution

Strategy&Ops Consultancy offers a comprehensive suite of services designed to guide financial institutions through this regulatory evolution. Our team of experts is proficient in the nuances of ASRS 1, ASRS 2, and ASRS 101, as well as the broader implications of the Exposure Draft ED SR1 and the sustainable finance framework. Our approach is holistic, ensuring that organizations not only comply with the new regulations but also capitalize on them to enhance their sustainability performance and reporting.

Our services include:

• Comprehensive Assessments: Evaluating the current state of compliance, identifying gaps, and developing a roadmap to meet ASRS requirements.
• Strategic Advisory: Offering expert advice on aligning sustainability and financial reporting processes with ASRS standards.
• Implementation Support: Assisting in establishing the necessary governance processes and controls for effective sustainability reporting.
• Training and Capacity Building: Educating teams on managing and reporting climate-related financial disclosures effectively.

Impact

Our consultancy has successfully partnered with financial institutions, enabling them to navigate the regulatory changes with confidence. By leveraging our services, our clients have been able to:

• Enhance transparency and accountability in their sustainability reporting.
• Integrate financial and sustainability reporting, providing investors with high-quality, credible, and comparable information.
• Establish robust governance structures that consider finance and sustainability reporting in decision-making processes.
• Position themselves as leaders in sustainability, ready to capitalize on the economic opportunities associated with Australia’s energy, climate, and sustainability goals.

Opportunities Ahead

As the regulatory landscape continues to evolve, Strategy&Ops remains committed to supporting financial institutions in their journey towards sustainability and compliance. Transitioning to mandatory ESG and climate-related financial disclosures offers organizations a multifaceted opportunity to enhance investor attraction and confidence, gain competitive advantage, and realize operational efficiencies leading to cost savings. It opens doors to green financing options, strengthens brand reputation and customer loyalty, and improves risk management. Additionally, this transition fosters innovation, enabling companies to tap into new markets and product lines aligned with sustainable practices. Moreover, it positions organizations as regulatory leaders with the potential to influence future standards and enhances their ability to attract and retain a workforce that values sustainability commitments. In essence, what might initially seem like a compliance requirement can actually serve as a strategic lever for growth, resilience, and long-term success in a rapidly evolving business landscape.