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How to prepare your organisation for mandatory sustainability reporting
Starting in 2025, Australian entities will be required to engage in mandatory sustainability reporting. The first reporting group must prepare reports for financial years commencing on or after January 1, 2025. For example, Group 1 entities with a year-end of June 30 will need to report for the financial year ending June 30, 2026.
While 2025 is only mandatory for Group 1 entities, Groups 2 and 3 should begin preparing now for their upcoming sustainability obligations.
Here we provide key insights to support your organisation’s sustainability journey and prepare for mandatory reporting. These recommendations will help you meet your sustainability obligations effectively and foster long-term success.
Data and technology
Consider what data your stakeholders and value chain will request, as well as the data you will need from stakeholders. This data may include measuring carbon footprints, tracking net-zero targets, and monitoring progress.
Technology can simplify reporting and uncover financial, social, and environmental value. Look for tools that enable easy data extraction, sharing, and emissions profiling. Ideal tools should also offer user-friendly interfaces, AI-driven automation to reduce manual effort, and forecasting capabilities for strategic planning. This will help track your performance against established targets.
Knowledge transfer
Training and knowledge transfer are vital for successful sustainability reports. Both auditors and reporting entities should invest in upskilling their teams. This can include engaging the finance department in carbon accounting, updating the board and executives, and raising awareness of information needs and targets across the organisation. Assign clear roles for data gathering and ensure that education and training are integral components of the sustainability strategy.
Avoid greenwashing
Greenwashing is a significant concern when it comes to mandatory sustainability reports.n 2023, the ACCC reported that 57% of 247 reviewed website made questionable claims about their environmental credentials. This raised alarms about misleading representations of environmental impact. The investigation highlighted practices such as vague and unqualified claims, a lack of substantiation, exaggerated benefits, the omission of key information, and the misuse of trust marks.
To avoid greenwashing, organisations should ensure all sustainability claims are substantiated and credible. Published carbon emissions should be reviewed, assurance-ready, and backed by realistic targets and actionable plans. Consistency between website statements and sustainability reports is essential for maintaining trust and credibility.
Be assurance-ready
To ensure credibility and compliance, align all sustainability claims on your website with the data in your reports. Proper preparation for sustainability reporting, especially in the first year, is crucial. Identify emission sources, establish boundaries, select methods, and gather all required data.
Follow the GHG protocol alongside the NGER Scheme, use reliable tools, and reconcile carbon data with the general ledger for accuracy.
Documentation is vital since undocumented actions are considered unexecuted from an audit perspective. Involve your auditor as early as possible, so you can prepare for what they expect to see and will review.
Voluntary sustainability reporting
Voluntary sustainability reporting is a proactive way to show your commitment to environmental and social responsibility while increasing transparency. Frameworks such as AASB S1, GRI, SASB, TCFD, and UN guidelines offer structured approaches to effective reporting.
Having assurance over these reports signifies a strong focus on sustainability, builds trust through independent verification, and provides stakeholders with insights into long-term value creation.
By refining reporting processes and integrating assurance measures, you can position your organisation as leaders in accountability and sustainable practices.
Next steps
As sustainability reporting becomes a mandatory part of business operations, we encourage you to view this as an opportunity. Seize this chance to foster responsibility, cultivate trust, and have a positive impact.
Be proactive now in capturing accurate data and integrating relevant technology. This will help you prepare for assurance measures and prevent greenwashing, protecting your organisation in the long run.
At RSM, we offer a comprehensive range of assurance and advisory services to support businesses in their sustainability efforts. Contact our ESG team to get started.
