How can climate reporting be more efficient? BDO’s view
How can climate reporting be more efficient? BDO’s view
Treasury's consultation on improving the efficiency of climate-related financial disclosures is a timely opportunity to reflect on the lessons learned and insights emerging from the first year of reporting.
Drawing on our experience supporting organisations through climate reporting and assurance readiness, we believe there are numerous opportunities to improve efficiency and proportionality without compromising disclosure quality, international alignment or implementation certainty.
In our submission to Treasury, we supported retaining limited assurance as the ongoing mandatory assurance requirement. In our view, this strikes an appropriate balance between maintaining confidence in sustainability disclosures and avoiding unnecessary compliance costs while reporting practices, methodologies and data quality continue to mature.
Based on our experience supporting organisations through their first reporting cycles, we continue to see a strong need for realistic implementation guidance. Many of the challenges organisations face are not caused by a lack of reporting requirements, but by uncertainty about how to apply principles such as proportionality, materiality and the use of reasonable estimates in practice.
We therefore support additional guidance, effective examples and government-produced or government-endorsed inputs that help organisations apply the existing requirements more consistently and efficiently. Priority areas include climate scenarios, value chain information, proportionality mechanisms, and the identification of material climate-related risks and opportunities.
We also see a significant opportunity to reduce unnecessary complexity through greater availability of credible domestic emissions factors and other authoritative secondary data sources. These resources can reduce reliance on burdensome value-chain information requests while supporting more consistent reporting and assurance outcomes.
We remain supportive of Australia's climate reporting regime and the benefits it is delivering. However, implementation and ongoing compliance costs can be substantial, particularly for organisations with limited exposure to climate-related risks and opportunities. The real opportunity of this consultation lies in improving efficiency and reducing complexity while preserving the quality and usefulness of sustainability disclosures.
