It has been just over a year since Australia legislated mandatory climate reporting for certain entities and recent conversations with CFOs, risk managers and sustainability leaders reveal both progress and ongoing uncertainty. Several clear themes are emerging that preparers should be mindful of as the first reporting deadlines approach. This article explores these themes and provides practical guidance to help CFOs and their teams navigate the challenges with greater confidence.
Limited visibility of the ‘final product’
Many preparers still lack a clear view of what compliant disclosure will look like. Without visibility of a ‘final product’, it is difficult to understand the relevance of the requirements for their organisation and to plan effectively. Early engagement with draft examples, industry guidance or pilot reports can help demystify the end goal and build confidence.
Competing priorities for finance teams
Business-as-usual reporting pressures are leaving little bandwidth for implementing sustainability frameworks and preparing climate disclosure. In some organisations, responsibility is drifting across functions without anyone truly taking ownership. Increasingly, CFOs themselves are stepping forward to champion the process, recognising that climate reporting is not a side project but a core extension of financial reporting and ensuring that it should be embedded into the finance function rather than siloed as a separate sustainability project.
Unclear ownership
Where we see progress, it is often because ownership has been assigned. Either an internal sustainability specialist has been tasked with leading the effort, or a Director or key management figure has stepped up to drive engagement and allocate resources. Without this leadership, climate reporting risks becoming another compliance ‘to-do’ task with no momentum. Organisations need to nominate a clear owner within the executive or finance team and ensure active cross-functional involvement, supported by board-level engagement.
Being ‘Assurance ready’
Although initial assurance requirements are limited to certain disclosures only, the full suite of disclosures is still required to be reported from year one. Many organisations are underestimating the time and effort needed to ensure that the end-to-end process, including data and information, is ‘assurance-ready’. Make sure to start the conversation early with your auditors and align expectations so that your processes, data collection, internal controls, governance framework and supporting documentation will meet the assurance requirements.
Timing considerations
One recurring issue in conversations with preparers is uncertainty over when the first disclosures are actually due. For example, some entities are only assessing their current size and status against the legislative thresholds, without taking a forward-looking view that factors in projected end-of-financial-year results. For instance, a private group on the cusp of crossing the employee or revenue thresholds may assume it will not be captured until later phases. But when growth plans, acquisitions or forecast earnings are factored in, the group could in fact fall into Group 1 or Group 2 for reporting purposes much earlier than expected.
We’ve already seen cases where entities assumed they were in Group 2 based on prior-year or early-year financial results, only to re-assess and discover they were in Group 1 once projected revenue growth was included in the assessment. That realisation is forcing them to accelerate preparations under significant time pressure. CFOs should assess their group classification now, not only by reference to current thresholds but also considering forward-looking growth plans. This assessment should be refreshed periodically as the business evolves. From there, it is essential to develop a detailed implementation roadmap well ahead of the statutory deadline, encompassing data collection, internal review, board sign-off and external assurance.
Board and Investor expectations
Another lesson from the past year is that boards and investors are approaching climate reporting from different starting points. Many directors are highly engaged but lack technical familiarity with the standards, while others are only just beginning to appreciate that climate reporting will sit alongside the financial statements in terms of visibility and assurance. At the same time, investors are expected to benchmark disclosures quickly across peer groups, focusing not only on compliance but also on comparability, credibility and evidence of a clear strategy. For preparers, this creates a dual challenge, meeting technical requirements while also meeting the market’s expectations for decision-useful information.
Directors must be aware of their statutory duties, as incomplete, misleading or misstated reporting can have serious consequences. They and other responsible officers may face regulatory scrutiny, personal liability and reputational damage if disclosures are found to be non-compliant or misleading. CFOs should take a proactive role in educating boards on the legislative requirements, reporting timelines and directors’ responsibilities in approving climate disclosures. Training sessions and regular briefings can help directors feel equipped to oversee climate reporting in the same way they oversee financial reporting. On the investor side, disclosures should be framed as part of broader corporate communication and governance, not as a compliance exercise.
Resourcing and costs
Many CFOs are uncertain how to budget for climate reporting. Costs can arise across systems implementation, staff training, governance processes and external advisory support. Under-resourcing carries real risks; inadequate systems or limited staff capability can result in poor-quality disclosures, assurance challenges and reputational impact. Climate reporting should be treated as a governance investment, not merely a compliance cost. Organisations should plan for incremental spending over several years, prioritising areas that directly affect reporting quality, including emissions data systems, risk management frameworks, internal controls, staff capability and external advisory support.
A growing challenge is the limited supply of skilled sustainability professionals and consultants. Demand for expertise in emissions measurement, scenario analysis and disclosure frameworks is outpacing supply, particularly among Australia’s first wave of reporting entities. To bridge this gap, CFOs should prioritise upskilling their finance and risk teams through targeted training, knowledge sharing and support from external advisors.
One year on, it’s clear that CFOs and their teams are at the front line of climate reporting. The challenges are significant, but the themes are becoming clear: ownership matters, data quality is critical and early preparation will ease the path to assurance readiness.
Now is the time to act to clarify responsibilities, engage boards and auditors and develop an implementation roadmap. By doing so, CFOs can move beyond compliance, embed climate reporting into governance and build trust with stakeholders and regulators from day one. Early preparation will set the tone for future reporting and position the organisation for long-term credibility and resilience.
If you’d like support with your climate reporting obligations or want to understand how the new sustainability reporting framework applies to your organisation, contact your local William Buck advisor.
