Australia Sets the Bar on Climate Reporting - Should Its Targets Follow Suit?

Australia’s Climate Reporting - Targets Gap

Australia has taken a world-leading step by making climate-related financial disclosures mandatory under the Australian Sustainability Reporting Standards (ASRS), beginning in January 2025. Major companies will now be required to disclose how they manage climate risks, aligning the nation with global best practices.

But transparency alone is not enough. Former UN climate chief Christiana Figueres has urged Australia to cut emissions by at least 75% by 2035, framing it as an opportunity to add A$370 billion to GDP. The paradox is clear: Australia leads in reporting, but seems to lag behind in climate targets.

Christiana Figueres’ Call for 75% by 2035

Figueres recently urged Australia to set a “prosperity target” of cutting emissions by 75% within a decade. Her argument was simple: ambition is not a burden, but a driver of economic growth.

This call is backed by over 350 businesses and linked to Australia’s aspirations to co-host COP31, a role that demands credibility on climate leadership.

International Climate Targets in Context

• The Climate Change Authority previously suggested a 65–75% cut by 2035.

• Climate Analytics went further, recommending 81% to align with the 1.5°C Paris Agreement target.

• UN climate leaders, including Simon Stiell, have warned Australia against setting a “bog-standard” 2035 target that fails to match global ambition.

The pressure is clear: transparency must be matched by ambition if Australia is to remain a serious climate leader.

ASRS 2025: Australia Leads in Climate Reporting

What the ASRS Means for Businesses

From 1 January 2025, ASRS came into force, making climate-related financial disclosures mandatory for the nation’s largest companies. Smaller organisations are being phased into the regime over time, ensuring that the framework captures the full breadth of Australia’s corporate landscape.

The ASRS is closely aligned with the IFRS S1 and S2 standards, embedding Australia within a global reporting baseline and ensuring comparability across markets. For businesses, the obligations extend well beyond basic emissions data: companies must now disclose how climate risks are governed, how they influence long-term strategy, and how they are integrated into risk management frameworks. Importantly, emissions must be reported across all three scopes—from direct operations and purchased energy to the often more complex value-chain footprint.

Why ASRS Is a Global Benchmark

Australia is among the first countries globally to introduce a comprehensive sustainability reporting regime, ahead of several major economies. This move enhances investor trust and ensures companies are transparent about climate risk.

However, while the ASRS shines a light on business readiness, it does not require companies to set or meet actual transition targets. That’s where the ambition gap emerges.

The Reporting-Ambition Gap Explained

What Disclosure Doesn’t Cover

Under ASRS, companies can technically publish sustainability reports that admit they have no transition plan in place. While this provides transparency, it risks normalising inaction.

What Disclosure Doesn’t Cover

Under ASRS, companies can technically publish sustainability reports that admit they have no transition plan in place. While this ensures transparency, there are concerns this can risk normalising inaction.

Risks of Misalignment

A legal opinion from MinterEllison cautions that while mandatory reporting is essential, it may also encourage companies to set lower, safer targets to avoid scrutiny or liability.

The ASIC chair has reinforced this by warning that companies must begin preparing immediately and avoid a “minimal compliance” approach .

Meanwhile, experts highlight that phased assurance and evolving liability frameworks will intensify expectations over time, creating real consequences for companies that fail to integrate climate strategy into core business planning.

Why Reporting and National Targets Must Work in Tandem

By September 2025, the ASRS disclosure framework has already mandated that large companies not only disclose climate-related strategies and risks (using a structured framework of governance, strategy, risk management, and, crucially, metrics and targets) but also explain how these targets are set and tied to international commitments.

In practice, this means businesses must present evidence of both their current emissions (Scopes 1, 2, and 3) and any climate-related goals, defining the mechanics of their ambition, whether gross or net, and any intended use of offsets, all within a sustainability report. These disclosures are not window-dressing; they are foundational to demonstrate integrity and strategic alignment.

But here’s the critical point: this corporate-level ambition is most effective if it is anchored to robust, credible national targets. It’s one thing for companies to set internal goals to reduce or neutralise their emissions. It’s another for those goals to align with the scale and urgency required for national decarbonisation, as demanded by international standards and climate experts.

Former UN climate chief Christiana Figueres has explicitly criticised Australia’s current trajectory, warning against a “bog-standard” 2035 target. She goes on to say this target is essential, not a burden, but Australia’s ticket into the prosperity of the future. Without such ambition, the ASRS reporting framework risks being seen as a tool for transparency alone, rather than a genuine driver of decarbonisation.

ESG360° Insight – Transparency Without Action Isn’t Enough

At ESG360°, we see the ASRS as a critical step forward. It puts climate risk at the center of business strategy and makes corporate sustainability visible to investors, regulators, and the public.

The next 12–18 months will be crucial. Australia must decide whether it will leverage its reporting framework to accelerate climate ambition—or remain transparent without transformation.

Through ESG360°Air, we help companies not just report but also plan credible transition strategies that align with investor expectations and future policy direction.

FAQs

What is the ASRS and when does it start?
The Australian Sustainability Reporting Standards (ASRS) make climate reporting mandatory for large companies from January 2025, with smaller firms phased in later.

How does Australia’s ASRS compare globally?
Australia is one of the first countries worldwide to mandate climate-related disclosures aligned with international standards like IFRS S1 and S2.

Why is Christiana Figueres calling for a 75% emissions cut by 2035?
She frames it as a “prosperity target”, arguing it could boost GDP by A$370 billion and position Australia as a global climate leader.

What risks do companies face under ASRS Reporting?
Companies may face litigation or reputational damage if they set ambitious targets and miss them - leading some to under-promise.

Why do stronger climate targets matter for businesses and investors?
They provide certainty for investment, attract green finance, and help Australia avoid the risks of stranded fossil fuel assets.