Climate reporting: from timelines to implementation

Wed 24 June 2026
5 MIN READ

Karen McWilliams

Chartered Accountants ANZ

Climate reporting is no longer on the horizon - it’s here. Australia’s mandatory regime has moved into implementation, with early disclosures offering practical lessons as organisations shift from readiness to delivering credible, proportionate reporting. Here’s what early reporting is revealing - and how to apply it.

Key points

Climate reporting has moved into delivery mode - boards and management are now focusing on providing proportionate and credible information rather than just meeting timelines.
Initial Group 1 reports demonstrate solid foundations: strong governance involvement, cross-functional collaboration, and risk identification, along with the expected first-year variability under AASB S2.
For Groups 2 and 3, the main priority is to begin and build capability - this includes documenting judgments and assumptions and engaging assurance practitioners early in the process.

Woman using tablet with sustainable technology hologram

Australia’s mandatory climate reporting regime has moved from policy discussion to practical delivery. The first wave of Group 1 reports are published and reporting entities can take many insights and learnings from them. For many boards and management teams, the key question is no longer when climate reporting applies, but how to implement it in a way that is proportionate, credible and workable.

That shift has been clear in discussions through the Sustainability Reporting Community of Practice (SRCoP). Launched in July 2025 as a partnership between the Australian Securities Exchange (ASX), UN Global Compact Network Australia (UNGCNA) and Chartered Accountants Australia and New Zealand (CA ANZ), the SRCoP helps business professionals navigate sustainability reporting requirements, share learnings and knowledge, and foster collaboration in a safe space. Across listed entities, advisors and assurance providers, a consistent picture is emerging: organisations are actively looking for practical ways to get started and build capability over time, while navigating some of the more complex aspects of the new regime.

Participants have highlighted several recurring areas where they have sought guidance and peer learnings. The first is navigating the requirements of Australia’s new climate reporting requirements under Chapter 2M of the Corporations Act and AASB S2 Climate-related disclosures, particularly where these intersect with existing financial reporting, governance and risk frameworks. For many organisations, interpreting how to apply the standards in practice, and how much to do in the early years, remains an area for discussion amongst peers.

Alongside this, there is strong demand for practical, implementation‑focused support. Organisations are looking for examples, tools and peer insights that help them translate requirements into day‑to‑day reporting, systems and governance processes.

Building capability is also a clear theme. Many entities in Group 1 have utilised the assistance of consultants to help develop methodologies and use this expertise to build internal capability. Entities in Groups 2 and 3 typically have less resourcing and specialist expertise so will need to build their internal capability directly, ensuring they allow sufficient time to do so.

"There is strong demand for practical, implementation‑focused support."

Finally, there is a focus on assurance and audit readiness. As the level and scope of assurance is being phased in, organisations recognise that judgements made in early reporting cycles — especially around proportionality, assumptions and uncertainty — will be revisited over time. Clear documentation, consistent terminology and robust governance are increasingly seen as essential foundations for the disclosures. Not just to support the assurance process, but also in readiness for regulatory oversight.

What early reporting is showing

The first AASB S2 reports are out and early insights on the first wave of Group 1 reports from PwC, Deloitte and KPMG reinforce many of the themes raised through the SRCoP, but they also point to some important early strengths.

The reviews highlight several positive developments.

"Across the early reporting cohort, governance structures are generally well established, with climate risks and opportunities commonly integrated into existing risk and oversight frameworks."

One is strong board and senior management engagement. Across the early reporting cohort, governance structures are generally well established, with climate risks and opportunities commonly integrated into existing risk and oversight frameworks. Audit and risk committees have played a central role in overseeing the development of the disclosures, with boards engaged in review and challenge, even where data and methodologies are still maturing.

Another positive is the speed at which organisations have mobilised cross‑functional teams. PwC, Deloitte and KPMG all observe that first‑year climate reporting has required coordination across finance, risk, sustainability, operations and strategy functions. While this has increased the time and effort involved, it has also improved internal understanding of climate‑related risks and opportunities and strengthened internal dialogue.

Early reporting has also helped organisations establish a credible baseline. Many first‑wave reporters have focused on putting in place structurally sound disclosures, identifying key risks and governance arrangements, and documenting methodologies and assumptions. This provides a solid platform for further refinement in future reporting cycles.

A defining feature of first‑year reporting is variability. Initial disclosures vary widely across industries and between peers, reflecting differences in exposure to climate risks, data maturity and internal capability. This variability is expected particularly in the first reporting cycle and is explicitly accommodated under AASB S2 through the use of judgement and proportionality.

Scenario analysis and quantification remain uneven, but there are positive signs. Deloitte and KPMG note that more advanced practices are emerging in sectors with long‑lived assets and higher exposure to climate risk, and PwC highlights improvements in the clarity with which assumptions and limitations are explained. These developments contribute to improved transparency as data, methodologies and disclosures evolve.

Importantly, none of the analyses suggest that early reporters view their first disclosures as 'finished'. Instead, early reporting is widely being treated as the start of an iterative process — one where disclosures are expected to improve as data quality, tools and internal capability mature.

Different starting points, shared priorities

For Group 2 and Group 3 entities, their level of preparedness will differ to Group 1 entities and this in turn will affect their lead time for reporting. These entities often face tighter resourcing constraints and will need to be particularly deliberate about where to focus effort.

The lessons from early reporting point to a measured, incremental approach. Organisations that are progressing most effectively are embedding climate into existing governance and risk frameworks, building emissions capability step by step, and clearly documenting assumptions and judgements.

This is not about achieving technical perfection in year one. It is about establishing credible foundations that can be strengthened over time as expectations evolve and assurance expands.

Across SRCoP discussions and early reporting reviews, capacity remains one of the most significant constraints. Demand for climate and sustainability expertise is growing rapidly across finance, risk and operational teams, and many organisations remain reliant on a small number of key individuals.

Boards therefore have a critical role to play — setting expectations, prioritising effort, and ensuring climate information supports decision‑making rather than being treated as a compliance exercise.

"Across SRCoP discussions and early reporting reviews, capacity remains one of the most significant constraints."

Learning together

One of the strongest messages from the SRCoP is the value of peer learning. Climate reporting is very much developing in practice, and therefore no single organisation has the disclosures and processes all worked out. Sharing experiences — including how early challenges have been addressed — is helping lift practice across the market.

As regulatory and stakeholder scrutiny increases, the focus will continue to be on disclosures that are credible, proportionate and decision‑useful. Climate reporting is now firmly part of the corporate reporting landscape. The task ahead is to build systems, skills and governance that will stand up over time.

What matters most for Group 2 and Group 3 entities

"Early reporters also consistently note that climate reporting takes longer than expected — not because of technical complexity alone, but because it requires coordination across finance, risk, operations and governance."

For Group 2 and Group 3 entities preparing their first climate reports, the experience of early Group 1 reporters offers some clear, practical lessons.

The first is the importance of starting now, before formal reporting is required. Group 2 and 3 entities are less likely to have done voluntary reporting and so are less prepared than many Group 1 entities. They also have less internal capacity and capability and may not have the resources for external consultant support. Early reporters also consistently note that climate reporting takes longer than expected — not because of technical complexity alone, but because it requires coordination across finance, risk, operations and governance. Early preparation allows organisations to identify gaps, test processes and build internal understanding without additional reporting‑period pressure.

Starting early does not mean finalising disclosures in advance. It means beginning foundational work — clarifying governance responsibilities, mapping data sources, understanding key judgements and testing how climate risks connect to existing risk and strategy frameworks.

A second, closely related message is the importance of documentation. Judgements around proportionality, assumptions and uncertainty are built into AASB S2, but they need to be supported. Early reporters have found that clear documentation of methodologies, decisions and limitations not only supports internal consistency, but also prepares organisations for assurance and regulatory scrutiny.

A further practical lesson from early reporters is the value of early engagement with assurance providers. Even for those disclosures where formal assurance is not yet required, working with assurance teams can help organisations better understand how judgements, assumptions and controls are likely to be viewed over time. For many, these early conversations have helped clarify expectations, strengthen documentation and improve internal processes before assurance over those disclosures becomes mandatory.

Finally, capability and resourcing choices matter. Many organisations underestimate the internal effort required for climate reporting, particularly the demands placed on finance and governance teams. Boards and senior management play a critical role in prioritising effort, setting realistic expectations and ensuring climate information is integrated into decision‑making, rather than treated as a parallel sustainability exercise. For organisations engaging external consultant support, this work should be leveraged to build internal capacity and capability to support ongoing climate reporting.

"Many organisations underestimate the internal effort required for climate reporting, particularly the demands placed on finance and governance teams."

Early experience shows that climate reporting is most effective when organisations start early, focus on fundamentals and treat the first year as the beginning of an iterative journey rather than a one‑off exercise. Across the first wave of Group 1 reporting, organisations are demonstrating that credible disclosures are achievable even where data and methodologies are still evolving, with boards and senior leaders already making judgements in the context of future assurance and regulatory scrutiny. This underscores the importance of strong governance, clear documentation and internal ownership, particularly as the value of climate reporting increasingly lies not only in comparability with peers and industry, but in providing consistent, comparable information for the organisation itself over time. With disciplined foundations and a commitment to learning, climate reporting can be progressively strengthened as expectations continue to evolve.