Navigating the Australian Standard on Climate-related Financial Disclosures (ASRS): Challenges and Solutions for Businesses

The Australian Standard on Climate-related Financial Disclosures (ASRS) has been introduced to bring businesses in line with global reporting frameworks, ensuring climate-related risks are disclosed in a consistent and comparable manner. These disclosures are crucial for stakeholders, investors, and the broader public, who are prioritising sustainability and resilience in their decision-making processes. However, for many businesses, particularly small-to-medium enterprises (SMEs), compliance with these climate-related reporting requirements can be overwhelming.

Understanding ASRS Compliance

The ASRS requires businesses to report on governance, strategy, risk management, and key metrics and targets, particularly focusing on Scope 1, 2, and 3 emissions. These emissions cover direct emissions (Scope 1), indirect emissions from purchased energy (Scope 2), and emissions from the broader value chain, including suppliers and customers (Scope 3). The phased implementation of the ASRS groups businesses into three categories based on revenue, assets, and employee numbers:

Criteria	Group 1 – Jan 1, 2025	Group 2 – Jan 1, 2026	Group 3 – Jan 1, 2027
Consolidated Revenue	$500M+	$200M+	$50M+
Consolidated Assets	$1B+	$500M+	$25M+
Number of Employees	500+	250+	100+

Estimates suggest that over 6,000 Australian businesses will be directly impacted by mandatory reporting, and due to the inclusion of Scope 3 emissions, an additional 80,000 entities—primarily SMEs—may be required to provide climate-related data to their larger clients.

The Challenges of ASRS Compliance

For many businesses, particularly those new to climate reporting, the requirements of ASRS can be daunting. The key challenges include:

• Complexity of Reporting Requirements – Understanding and implementing the governance, strategy, risk management, and disclosure requirements is resource-intensive.
• Data Collection and Management – Many businesses lack the necessary systems to track and report emissions data accurately.
• Scope 3 Emissions Complexity – SMEs that supply to larger companies may struggle to quantify their emissions in a way that aligns with ASRS reporting requirements.
• Financial and Operational Impact – Implementing new reporting structures requires time, expertise, and financial investment.

Without expert guidance, businesses risk non-compliance, which could lead to reputational damage, lost business opportunities, and even financial penalties.

How Climate Logic Can Help

At Climate Logic, we specialise in helping businesses navigate climate-related financial disclosures with practical, tailored solutions. Our services include:

1. Understanding ASRS and What It Means for Your Business

We break down the ASRS requirements into clear, actionable steps so businesses can understand their specific obligations and timelines.

2. Data Collection and Reporting Assistance

We help businesses establish processes to track and report Scope 1, 2, and 3 emissions, ensuring compliance with ASRS reporting standards.

3. Scope 3 Emissions Support for SMEs

If your business supplies to a larger company required to report under ASRS, we provide guidance on how to calculate and disclose your emissions to meet client expectations.

4. Risk Management and Strategy Development

We assist businesses in identifying climate-related risks and integrating sustainability strategies into their operations to enhance long-term resilience.

5. Technology and Automation Solutions

We leverage innovative tools to streamline emissions tracking and reporting, reducing the burden on internal teams.

6. Customised Training and Workshops

We provide in-house training to equip teams with the knowledge needed to maintain compliance with evolving climate disclosure requirements.

Preparing for the Future

While ASRS mandates reporting for larger organisations, the ripple effect on SMEs is undeniable. Proactively implementing sustainability reporting processes now will put businesses ahead of their competitors, securing long-term partnerships and future-proofing operations.

At Climate Logic, we simplify the complexities of climate-related financial disclosures so businesses can focus on what they do best—growing sustainably. Whether you’re directly impacted by ASRS or part of a supply chain required to provide emissions data, we can help you navigate these new regulations with confidence.

Need assistance with ASRS compliance? Contact Climate Logic today to get started.