Discover why pre-assessment is key to ensuring climate assurance readiness. Learn how it identifies gaps, enhances compliance, and adds strategic value to your reporting processes.

Why Pre-Assessment is Key to Climate Assurance Readiness

Written by 
Jake Atkinson, Principal Consultant, Climate and Nature

Australia’s Climate Disclosure Reporting: What You Need to Know for 2025

As of the 1st of January 2025, Australia’s climate disclosure reporting regime has been in place. Leading up to this, much of the focus had, rightly, been placed on the necessary actions needed to meet the new disclosure requirements.  

However, not long after the turn of the new year, an important but less reported development also occurred. The Australian Accounting Standards Board (AASB) finalised the phased assurance timeline for disclosures, confirming the level of assurance required for an organisation’s disclosures in future reporting cycles. 

Financial assurance is an established process through which an independent auditor verifies its disclosures, providing stakeholders confidence that information presented is accurate and compliant, adding credibility to reporting.

Assurance of non-financial metrics such as emissions reporting is also well-established, but not a mandatory requirement for corporate reporting in Australia until now with the introduction of mandatory climate-reporting. 

With our in-depth knowledge of reporting standards, whether ISSB, CRSD or ASRS - our readiness assessment process will consider which standards are relevant for your business.

Download our ASRS Readiness Assessment & Roadmap Guide today.

Key Terms to Know for Climate Assurance Readiness

Pre-assessment (also known as pre-assurance or assurance readiness):

A “dry run” of assurance procedures to identify weaknesses or gaps in reporting before public assurance.

Conducted as a confidential exercise, ensuring assurance statements are free from qualified opinions prior to commencing them.

Offers greater strategic value, as it’s not constrained by the same independence requirements as standard assurance.

Provides a lower level of confidence compared to reasonable assurance.

Involves a less extensive review, typically through inquiries and analytical procedures.

The auditor concludes that nothing material has come to their attention that would misstate the information.

Required for Scope 1 and 2 emissions, as well as governance and strategy components of AASB S2 in year 1 of disclosure.

Expands to all requirements of the standard in year 2.

Involves a more thorough examination, including detailed testing of evidence from a significant sample.

Provides a high level of confidence that the information is free from material misstatement.

All components of mandatory climate-related disclosures are expected to obtain this level of assurance by the fourth year of disclosure.

Figure 1 below: Illustrated example of what a proactive assurance readiness workstream may look like.

Optimising Your Timing for Climate Disclosure and Assurance Readiness

It’s critical to consider assurance requirements early in the development of your disclosure processes. In some instances, the methodologies you choose—such as for calculating Scope 3 emissions—may need to follow specific approaches to to meet its limited and then reasonable assurance requirements.  

Many industry leaders aim to meet disclosure reporting requirements a year in advance. By preparing their disclosure actions and undergoing a pre-assessment review, they gain confidence that their disclosures will be ready for assurance with minimal disruption. This proactive approach helps avoid delays caused by issues identified during the assurance process, which could impact the workload during the busy reporting season when adjustments are most challenging to make.

The best time to start your climate disclosure journey was in the past; the second-best time is now—and the same applies to your assurance requirements.

Why More Companies Are Choosing Independent Providers for Pre-Assessment Services

In the past, many companies relied solely on their assurance provider for pre-assessment, assuming it was their only option. However, a growing number of organisations are now opting for separate providers to handle this critical step, particularly for their sustainability reports.

A Different Perspective Focused on Value Creation Beyond Compliance

Whilst assurance is focussed on achieving compliance to a specific standard, a pre-assessment exercise can generate recommendations which provide broader benefits in terms of strategic operating advantages. 

For example, a client recently shared that their auditor had advised against setting a decarbonisation target, as AASB S2 didn’t explicitly require one. This advice, however, failed to consider the client's broader operating environment, where their largest customers were decarbonising their supply chains and expecting similar commitments from their suppliers to maintain business relationships.

The above example highlights why engaging with an experienced subject matter expert in sustainability and climate change is likely to yield greater overall benefits from performing this process.

Whilst assurance is typically provided by accountancy firms, there has been an acknowledgement that the sector requires material upskilling to meet the requirements of the new sustainability and climate standards.

Whilst engaging with your assurer, it is likely they will be limited in the capacity in which they can advise you due to independence requirements.

Having a strategic partner who can operate in more of an advisory capacity for your assurance readiness will provide the same process, with greater capacity in providing the necessary recommendations to elevate your processes.

In addition to this, an independent advisory partner will typically be able to operate at a lower operating cost due to more flexibility in engagement models, thus providing greater overall value for money.

Take the First Step Towards Assurance Readiness

Preparing for mandatory assurance requirements is critical to ensuring your reporting is accurate, compliant, and strategically positioned.

Exploring all available options can unlock significant value and set you up for success.

If you're looking to review your options or need support with pre-assessment, reach out to Edge’s Climate and Nature Principal, Jake Atkinson or get in touch today. 

Let’s work together to streamline your reporting processes and drive meaningful results.

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Discover the essentials of climate transition plans for ASRS compliance. Learn how to navigate mandatory climate-related financial disclosures and prepare your organisation for upcoming reporting standards

Understanding climate transition plans for ASRS compliance

Written by 
Jake Atkinson, Principal Consultant, Climate

Most corporate sustainability professionals are currently focused on one major issue: the introduction of mandatory climate-related financial disclosures.

Since the International Sustainability Standards Board (ISSB) introduced its climate-related financial disclosure standard just over a year ago, economies representing over 50% of the world's GDP have commenced the introductory of mandatory climate reporting standards.

In Australia, the Australian Sustainability Reporting Standards (ASRS) have made significant progress in clarifying many elements of climate-related financial disclosures. However, uncertainties remain regarding the application and definitions of several terms within the standards. One key area of concern is the requirement for a transition plan.

The phrase “transition plan” is referenced five times within the standard, four of which state the need to disclose the transition plan, with only one providing a definition:

“An aspect of an entity’s overall strategy that lays out the entity’s targets, actions or resources for its transition towards a lower-carbon economy, including actions such as reducing its greenhouse gas emissions.”

This definition might lead organisations to believe that the transition plan is a straightforward part of the disclosure standard. In reality, it may be one of the most complex components of a company’s climate-related financial disclosure.

Government guidance and potential pathways

Recognising the need for clarity, the Australian Government has recently published its Sustainable Finance Roadmap. The Treasury announced it will develop and publish best practice guidance for transition plans by the end of 2025.

In the same week on the other side of the world the ISSB assumed responsibility for the Transition Plan Taskforce (TPT), a UK based transition plan framework provider, which launched its framework at the end of 2023 during COP26.

This means that the TPT Framework may be used as the basis for designing the guidance, with some likely adjustments to include the Federal Governments own Net Zero Plan and sector decarbonisation pathways.

Given that the ASRS was informed by the international ISSB S2 standard, it is reasonable to assume that the upcoming Treasury guidance on transition plans will align with these standards. Since the ASRS prescribes a 1.5°C aligned scenario, the Treasury may also require that transition plans adhere to the same emissions trajectory.

There has already been some progress in connecting the ISSB S2 standard with the TPT framework. The TPT has shared a technical mapping document highlighting which components of the ISSB standard can form the foundation of an entity’s transition plan. Before the TPT, the Glasgow Financial Alliance for Net Zero (GFANZ) published its own transition planning guidance, which several financial institutions have used in their disclosures.

In summary, companies required to disclose under the ASRS are seeking guidance on drafting their transition plans, which will commence on January 1, 2025, with first reports due at the end of 2025 and into 2026.

This guidance may not come soon enough for many disclosing against the ASRS for the first time. Fortunately, the TPT and ISSB frameworks provide a basis for inferring what the upcoming guidance may include. Given the complexity and importance of transition plans, it will be essential for Group 1 reporting companies, in particular, to begin their transition planning early.

Companies that embraced the TCFD and ISSB standards early are experiencing smoother ASRS implementation. Those who look to established guidance and market practices for transition plans will reap similar benefits.

By engaging with external support, you can expect to offset compliance costs and stay ahead of this complex aspect of external disclosure.

Edge Impact has been undertaking climate risk assessments for the last 15 years across a range of sectors and industries. We have one of Australia’s largest and most experienced teams that specialise in climate risk and disclosure. 

Explore our range of Mandatory Climate-Related Financial Disclosure resources

An aspect of an entity’s overall strategy that lays out the entity’s targets, actions or resources for its transition towards a lower-carbon economy, including actions such as reducing its greenhouse gas emissions. – ASRS

What are the steps that need to be taken to start to put together a transition plan?

Look to the existing guidance already in the market just not clearly labelled, similar to how early TCFD adopters began. We can help you make sense of this.

Do I have to publish my transition plan externally? Or is it enough to just have one?

These have to be disclosed externally and assured as part of your ASRS disclosures.

For more information contact Mark Siebentritt, our Global Practice Lead for Climate or get in touch here.

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Jake Atkinson is a Principal Consultant and Climate Resilience Lead at Edge, with over 10 years of consulting, finance, and policy experience in Australia and the UK.

He combines his accounting background with expertise in sustainability reporting standards to help large-listed companies implement climate-related disclosures. A fellow of the ACCA, Jake sits on its global sustainability forum.

His clients include Westpac, Ampol, CSR, GPT, Transport for New South Wales, UNSW, Allianz, and UniSuper. Jake has also contributed to sustainability reporting excellence in the EU and advised UK legislators on mandatory climate reporting.

Jake has over 10 years of experience, specialising in climate disclosure advisory. He has leveraged his background as an accountant, underpinned with technical knowledge of sustainability reporting standards, to lead the implementation of climate risk assessments and disclosure functions in large-listed companies in Australia and the UK.

Articles by Jake Atkinson