Could your board substantiate the sustainability report it signs?
ASIC’s review of Australia’s first mandatory climate-related financial disclosures offers an encouraging sign: reporting is improving, and businesses are engaging more meaningfully with climate-related risks and opportunities.
In Report 839, ASIC examined a sample of 40 sustainability reports for financial years ending 31 December 2025. It found improvements in the quality, quantity and consistency of information compared with earlier voluntary disclosures, alongside examples of businesses adapting their governance and risk management processes. It also identified areas needing further development, particularly forward-looking disclosures and information dependent on assumptions or judgement.[5]
For boards and executive teams, these findings raise a practical question: can the organisation demonstrate how its reported conclusions are supported—and how they influence business decisions?
When directors approve a sustainability report, they need to understand how its conclusions were reached, which assumptions matter and whether the evidence supports what the organisation is saying. That confidence is built throughout the year—in operational records, financial assessments, management reviews and board decisions. The reporting deadline brings those disciplines into view.
Accountability starts well before the declaration
Imagine a board paper stating that climate risk is “actively managed”. What would directors need to see to support that statement?
A risk register would be a starting point. A stronger evidence base would also identify who owns the exposure, what management has done, how progress is monitored and when the board last considered whether the response remains adequate.
The same test applies to a reported reduction in emissions. Does it reflect an operational improvement, a change in business activity, a revised calculation or missing information? Each explanation could lead to a different management decision.
These are useful questions for executive teams to resolve before a report reaches the board. Responsibilities should be explicit: who supplies the information, who checks it, who approves significant judgements and who escalates gaps?
In our view, the CEO should ensure that material findings influence business priorities. The CFO should connect them with financial planning and investment decisions. Risk, operations, procurement and sustainability leaders should be accountable for the exposures, actions and information within their responsibilities.
Internal confirmations from those executives can help directors understand what has been checked and what remains uncertain. They are a governance discipline, distinct from the statutory directors’ sustainability declaration.
ASIC’s guidance explains why this preparation matters. For financial years commencing between 1 January 2025 and 31 December 2027, directors declare their opinion that the entity has taken reasonable steps to ensure the sustainability report complies with the Corporations Act and AASB S2. For financial years commencing on or after 1 January 2028, the declaration moves to an opinion on compliance.[1] Boards should use that transition to strengthen the processes supporting their judgement.
The commercial test: what would we do differently?
Reporting becomes more valuable when its findings influence a decision.
Consider a business planning to expand a facility. Climate analysis might identify exposure to flooding, heat or water constraints. Management can then examine whether the proposed location, design, operating costs and investment assumptions remain appropriate.
Or consider a business whose energy costs are rising. Reliable consumption data, considered alongside production and cost information, could help distinguish inefficient equipment from changes in activity and support a better assessment of upgrade options.
These examples illustrate how reporting information can inform risk mitigation and strategy. The benefit comes from evaluating responses, assigning responsibility and following through.
AASB S2’s financial focus makes this connection particularly relevant: it addresses climate-related risks and opportunities that could affect cash flows, access to finance or the cost of capital.[2]
A useful board discussion should therefore extend to questions such as:
· Which investment assumptions need to change?
· Where would an operational improvement reduce exposure?
· Which suppliers or assets require closer attention?
· What opportunities deserve further investigation?
· What action has management taken since the last assessment?
The analysis may support a decision to invest, adapt, investigate further or accept a risk within agreed limits. Recording the reasoning makes the decision easier to revisit as conditions change.
Evidence should remain useful after the reporting team moves on
ASIC’s first review assessed published disclosures; it did not examine companies’ underlying sustainability records or audit files. The regulator has nevertheless signalled closer examination of the records supporting climate risk and opportunity assessments in future surveillance.[6] Boards should therefore consider how readily management could substantiate a disclosure if asked. Where reporting relies on spreadsheets, emailed documents and separate folders, the practical challenge is to preserve the connection between source evidence, calculations, assumptions and approvals across reporting periods.
Spreadsheets can form part of a controlled reporting process. The risk arises when source documents become disconnected from calculations, changes are difficult to track or review responsibilities are unclear.
Staff change. Advisers finish engagements. Calculation methods evolve. A board or assurance provider may need to understand a conclusion long after the original work was completed.
Digitalisation can help preserve that organisational knowledge, provided the evidence remains connected to the information it supports.
For an emissions calculation, that connection might run from an energy bill to a site and reporting period, through the selected conversion factor and calculation, to the reported result. For a governance disclosure, it might connect a stated oversight process with committee responsibilities, meeting papers, minutes and recorded actions. A clear audit trail should help a reviewer establish where information came from, how it was processed, what changed and who reviewed it. Estimates and limitations should remain visible.
Specialist sustainability platforms, including Green2View, can help organise operational data, supporting documents and audit trails within a consistent reporting environment. Their practical value is in making evidence easier to trace, review and retrieve.
That capability needs to sit within clear responsibilities, access controls, review procedures and retention arrangements. Software supports the work; management and directors remain responsible for the judgements made.
The measure of a sound process is whether another person can follow the evidence, understand the judgement and reproduce the result.
Build a capability the business can keep using
ASIC Commissioner Kate O’Rourke’s observation—“We don’t want the baseline to become the benchmark”—is a useful challenge for leadership teams.[3] Improvement should be visible in the organisation’s ability to explain its conclusions, address weaknesses and use the findings. A longer report, by itself, tells a board little about whether that capability has developed.
The impact also extends beyond the reporting function. Once information is consistently owned, documented and reviewed, it can support planning, procurement, operational oversight and responses to customer or financier enquiries.
Australia’s statutory sustainability reporting requirements currently focus on climate. ASIC notes that Parliament may introduce other sustainability subjects over time; broader mandatory ESG reporting is a possibility, rather than an established timetable.[4] Businesses can nevertheless build adaptable evidence and governance processes now.
For the next reporting cycle, boards could ask management to demonstrate one material disclosure from source evidence through to review—and explain what business decision the underlying analysis informed.
That exercise can reveal where accountability is clear, where evidence is missing and where reporting effort is delivering commercial value.
Before signing, could your board follow the evidence—and see how the business has acted on it?
Sources and acknowledgement
1. ASIC, What should your sustainability report contain?, directors’ declaration.
2. AASB, AASB S2 Climate-related Disclosures, paragraphs 1–2.
3. ASIC, Early observations from mandatory climate reporting, Commissioner Kate O’Rourke, 27 May 2026.
4. ASIC, Sustainability reporting.
5. ASIC, ASIC observes improved sustainability reporting and notes areas for further development, 21 September 2026, summarising Report 839, ASIC’s review of sustainability reports lodged for 31 December 2025.
6. ASIC, Report 839: ASIC’s review of sustainability reports lodged for 31 December 2025, September 2026, pages 7 and 10.
This Green2View commentary was prompted by David Pitts’ article, “First-year reporting is only the beginning: Businesses are expected to improve their disclosures over time”, Accounting Times, 12 October 2026. The practical examples and recommendations above are Green2View’s perspective.
