As sustainability regulations gain momentum worldwide, navigating compliance and strategic alignment poses a growing challenge for organisations, as they actively incorporate sustainability into their business strategies.
This shift not only emphasises the formalisation of sustainability initiatives but also underscores the importance of enhanced communication and transparency. Understanding the intricate relationships between reporting frameworks, standards, regulations, goals, and investor-focused ratings becomes paramount for companies as they navigate the short, medium, and long-term impacts on their business activities.
CDP Reporting
CDP, formerly known as the Carbon Disclosure Project, helps organisations, such as investors, companies, cities, states, and regions, disclose their environmental impact across three topics: Climate Change, Water Security, and Forests.
The ISSB develops standards to ensure a global baseline of sustainability disclosures aligned with the needs of investors and financial markets. The ISSB acts as an independent standard-setting body within the IFRS Foundation.
The Australian Government’s Safeguard Mechanism was introduced in 2016 and places limits on Australia’s largest emitting sites or ‘facilities’. Currently around 215 facilities that emit over 100,000 tonnes of carbon dioxide equivalents (tCO2-e) are covered under the Safeguard Mechanism.
National Greenhouse Energy Reporting scheme (NGERS)
NGERs or the National Greenhouse and Energy Reporting scheme, is Australia’s national legislative framework for reporting and publishing company information about greenhouse gas (GHG) emissions, energy production and energy consumption. It is administered by the Clean Energy Regulator (CER) who register and deregister corporations for reporting, receive reports submitted through the Emissions and Energy Reporting System (EERS) and who enforce compliance of the Act.
The new Australian Sustainability Reporting Standards (ASRS), are aligned internationally with the ISSB Standards, and will redefine corporate responsibility in Australia. AASB S2 climate-related disclosures – applicable for mandatory climate reporting (integrates IFRS S1 and S2). AASB S1 general sustainability reporting requirements (voluntary for sustainability matters other than climate).
The ISSB develops standards to ensure a global baseline of sustainability disclosures aligned with the needs of investors and financial markets. The ISSB acts as an independent standard-setting body within the IFRS Foundation.
Task Force on Climate-Related Financial Disclosures
The TCFD’s aim was to develop consistent climate-related financial risk – and opportunity – disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. The TCFD framework was adopted internationally at a rapid pace and became the backbone of climate-related disclosure.
Task Force on Nature-Related Financial Disclosures
The Task Force on Nature-related Financial Disclosures is a global initiative similar to the Taskforce on Climate-Related Financial Disclosures (TCFD) but is specifically focused on environmental risks and opportunities related to nature.
The TNFD framework aims to standardize and improve reporting on the impacts of business activities on nature, helping organizations assess and manage nature-related risks and opportunities effectively
Unlike financial accounting or carbon accounting which are generally formulaic processes, accounting for nature is a complex process. How do you ‘quantify’ natural capital and measure change in the health of the environment? Here we explore what is meant by the term natural capital, why it’s important and how does the Accounting for Nature framework help us quantify nature?
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