Overwhelmed by mandatory climate reporting? Four questions to get you started
As of January 1, climate-related impacts are a reporting requirement in Australia. How can your company prepare? What are the potential risks and opportunities of mandatory climate reporting?
It’s a fast transition, and organisations face a complex set of new reporting requirements. While compliance is now a key driver, the challenge lies in defining risk ownership and governance, assessing climate risks and opportunities across your value chain, quantifying financial impacts, and integrating these insights into decision-making.
AECOM specialises in the detailed technical work that underpins credible climate disclosures. Our expertise spans risk assessments, scenario analysis, adaptation planning, and financial impact quantification – ensuring organisations can provide meaningful and defensible disclosures.
Our four key questions will help you navigate these requirements while strengthening your organisation’s ability to manage climate risks effectively.
Through initiatives like Climate Risk Ready NSW, we have helped organisations establish a structured and consistent approach to climate risk assessment. This groundwork gives decision-makers confidence in their climate risk disclosures and supports proactive resilience planning.
By investing in this foundational work now, your organisation can meet compliance obligations while building long-term resilience. Let’s get started.
Changes to climate-related reporting
New legislation in Australia and New Zealand is mandating large organisations to measure and report on climate-related disclosures, forcing organisations to take immediate action. New Zealand implemented mandatory disclosures through the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021. Disclosure requirements have been effective from 2023.
In Australia, reporting requirements were introduced via the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth) and have been effective since January 1, 2025.
What can we learn from New Zealand?
Two years ahead of Australia, there are lessons to be learned. The Financial Markets Authority conducted a review of 70 statements after New Zealand’s first year of mandatory reporting. The main areas for improvement were; fairer presentation of data, clearer explanation of process, and a need for organisations to find the right balance between too much and too little information.
How should you prepare for mandatory climate reporting? Four questions to get you started.
1. What are your risks and opportunities?
Start by evaluating how climate change might impact your operations, supply chains, markets, and strategic planning. Consider physical risks from extreme weather, and risks and opportunities from policy changes, technological advancements, and market shifts. Develop adaptation and transition plans outlining priority issues, necessary responses, and a governance framework.
Identify and quantify climate-related risks and opportunities. Disclose the metrics used to monitor these risks and responses. Collaborate with financial, operations, and risk experts to measure and disclose financial impacts. Use existing metrics to measure disruption, asset degradation, stoppages, and supply chain delays. Connect climate-related risks to adverse outcomes that these indicators can measure.
2. Tools are useful, but what is your risk-based approach and how will you engage stakeholders?
Understanding climate-related risks and opportunities requires more than just tools; it demands a risk-based approach and active stakeholder engagement. Tools can provide comprehensive analysis and transparency about the process and data gathered, helping to build internal capability and understanding of your organisation’s climate risk profile.
While mandatory reporting might be new, the skills needed to respond effectively aren’t. Our 18+ years working in the field tells us that engaging in collaborative conversations and workshops allows stakeholders to exchange experiences and knowledge more effectively, making the assessment more representative. Integrating engineering specialists into the process ensures that risks and adaptation solutions are practical, balancing physical and material costs with risk appetite.
3. How will you integrate risks into strategy and risk management for long-term resilience?
Long-term resilience needs to integrate climate risks into strategy and risk management processes. We’ve worked with organisations like the Department of Defence, Sydney Water, Stockland, and major Australian airports, which often have two key documents: one for long-term strategy and another for risk management. These frameworks guide daily operations while addressing future challenges.
Embedding climate impacts into these systems ensures effective responses to immediate and long-term challenges. We collaborate with clients to assess needs and readiness, using robust tools to identify priority risks, communicate insights to governance bodies and communities, manage risks, and report on them, fostering resilience at every step.
4. How will you monitor and measure risk and progress?
Continual review of climate-related risks and adaptation actions has always formed part of assessment standards, but mandatory climate disclosures demand greater rigour in monitoring and measuring climate impacts. Clear links are needed between risks or opportunities, outcomes, impact measures, and targets. Your organisation must track the likelihood of risks or opportunities, and the progress of adaptation measures to minimalise or capitalise on these. Significant resources may be required, but leveraging existing metrics and internal systems can improve efficiency.
We’ve developed guidelines for various organisations across sectors including the Climate Risk Ready NSW Guide and the Climate Change and Natural Hazards Risk Assessment and Adaptation Planning Guidelines.
So what’s next for mandatory climate reporting?
It’s clear organisations have significant work ahead to prepare for comprehensive reporting. Developing a robust program of work that also builds internal capabilities is essential. Remember, reporting is not the end game; it’s communication tool, assuring stakeholders that your organisation is aware, prepared, and responsive to change.
We take a collaborative approach to understanding our clients’ assessment and reporting needs to integrate resilience into their work. We apply robust tools to identify and manage priority risks and support clients in communicating insights to governance bodies and the community.
No matter where you are on your climate risk journey, please reach out to our Sustainability & Resilience Practice to help you advance further.
Supporting Brisbane Airport’s climate resilience journey
For nearly three years, AECOM has collaborated with Brisbane Airport Corporation (BAC) on climate change projects, starting with a risk assessment and adaptation plan, followed by a vulnerability assessment, executive training on climate disclosures, and a gap analysis against mandatory reporting standards. Each project builds on and applies previous findings and lessons, ensuring tailored recommendations for BAC’s context and operations. Stakeholder involvement has expanded from BAC’s Sustainability team to include finance, policy, strategy, risk, asset management, and aviation operations. This broader internal stakeholder participation has deepened BAC’s understanding of climate change, embedding it further into their planning and operations.