As ESG reporting becomes a regulatory priority in Australia, boards are expected to play a more active role in overseeing the accuracy, transparency, and strategic alignment of their organisation’s communication. With rising expectations from regulators, investors, and the broader community, Australian board administrators must ensure their ESG reports are intentional opportunities for establishing trust with stakeholders through data-backed communication.
The following guide provides insight into ESG reporting strategy. For more direction, check out ESG courses in Australia or explore the best ESG funds in Australia to see how investors are prioritising sustainability.
What Is ESG Reporting—and Why Does It Matter for Boards?
ESG reporting is the process by which organisations disclose how their operations affect the environment, society, and governance practices. Often referred to as sustainability reporting, it provides a transparent view of an organisation’s impact, risks, and long-term resilience.
ESG reporting ultimately serves as a tool for strengthening accountability, guiding strategy, and building trust with stakeholders.
Investors and financial institutions use ESG data to assess long-term investment risks, identify sustainable investment opportunities, and meet their own reporting obligations to beneficiaries and regulators. Regulators and government agencies rely on ESG reports to monitor compliance with environmental and social legislation, assess systemic risks, and develop evidence-based policy. In Australia, agencies like the Australian Securities & Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are increasingly focused on ESG-related risks and disclosures.
Australia’s ESG reporting environment is undergoing significant transformation, driven by regulatory developments and market expectations. Several key trends are reshaping the landscape:
- Mandatory Climate-related Financial Disclosures (MCFD) are being phased in, requiring large entities to report climate risks and opportunities alongside their financial statements.
- Phased implementation approaches are being adopted to allow organisations time to develop robust reporting systems and capabilities, with requirements typically starting with the largest entities before expanding to smaller companies.
- International standards alignment is becoming increasingly important, with Australian regulators working to harmonise local requirements with global frameworks such as the International Sustainability Standards Board (ISSB) standards.
Mandatory ESG disclosures are legally required and enforceable, with specific reporting standards, timelines, and penalties for non-compliance. Voluntary ESG disclosures allow organisations greater flexibility in determining what information to share and how to present it. While not legally required, these disclosures are often driven by market expectations, stakeholder demands, and competitive positioning.
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Understanding Australia's ESG Reporting Landscape
ESG reporting requirements in Australia are comprehensive and rapidly evolving. The regulatory framework encompasses multiple layers of legislation, standards, and guidelines across environmental, social, and governance dimensions.
Environmental
- National Greenhouse and Energy Reporting Act 2007 (NGER) – Requires large energy consumers and greenhouse gas emitters to report annually.
- Climate Change Act 2022 – Establishes Australia’s emissions reduction targets and governance framework.
- Mandatory Climate-Related Financial Disclosures (Treasury Laws Amendment Act 2024) – Phased implementation beginning with large entities from 2024-25.
- New Vehicle Efficiency Standard (NVES) – Introduces fuel efficiency standards for new light vehicles from 2025.
Social
- Workplace Gender Equality Act 2012 – Requires reporting on gender equality indicators for employers with 100+ employees.
- Modern Slavery Act 2018 – Mandates annual reporting on modern slavery risks and remediation actions for entities with consolidated revenue over $100 million.
Governance
- ASX Listing Rules and Corporate Governance Principles and Recommendations (4th edition, 2019) – Sets governance standards for ASX-listed entities with “if not, why not” reporting requirements.
- Australian Securities and Investments Commission (ASIC) Regulations – Encompasses continuous disclosure obligations and director duties.
- APRA Requirements – Includes climate risk management standards for APRA-regulated entities
The ASX Corporate Governance Council is currently reviewing the Corporate Governance Principles, with proposed updates focusing on:
- Enhanced stakeholder engagement and disclosure requirements
- Broader scope of risk disclosure, including climate and cyber risks
- Strengthened board diversity and skills disclosure
- Greater emphasis on culture and conduct oversight
Australia’s mandatory climate reporting framework is designed to bring ESG and sustainability reporting to the same level of rigor as financial reporting. Several key features define this framework:
- Phased implementation – Large entities (Group 1) from 2024–25, medium entities (Group 2) from 2026–27, and smaller entities (Group 3) from 2027–28.
- Australian Sustainability Reporting Standards – Developed by the Australian Accounting Standards Board (AASB), these are based on the IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) issued by the International Sustainability Standards Board. In Australia, these have been adopted as AASB S1 and AASB S2, which set consistent, enforceable requirements for disclosing sustainability issues and climate-related risks.
- Integration with financial disclosures – ESG- and climate-related financial disclosures must be embedded within mainstream reporting, highlighting how sustainability issues affect long-term financial performance.
- Scenario analysis and stress testing – Boards must assess climate-related risks under different scenarios, ensuring strategies are resilient in the long term.
- Assurance requirements – Limited assurance initially, moving toward reasonable assurance for certain sustainability metrics.
- Safe harbor provisions – A modified liability regime for forward-looking climate information, encouraging transparent disclosure of risks and opportunities.
This framework ensures ESG reporting is not a stand-alone exercise but part of the organisation’s broader financial reporting obligations, allowing boards to demonstrate long-term resilience and accountability.
International frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), the IFRS S1 and IFRS S2 standards, and the Global Reporting Initiative (GRI) remain central to ESG reporting practices. In Australia, mandatory climate-related financial disclosures draw heavily on IFRS S1 and S2, which have been localised through the AASB Sustainability Reporting Standards (AASB S1 and AASB S2).
For boards, this means a single ESG report can meet both local and global expectations:
- Financial disclosures TCFD-aligned reporting ensures organisations address governance, strategy, risk management, and metrics tied to climate-related risks.
- IFRS S1 and S2 alignment provides consistency with global sustainability reporting requirements, improving comparability for international investors.
- AASB standards adapt these frameworks to Australia’s regulatory environment while ensuring integration with mainstream financial reporting.
Many boards also choose to use GRI standards voluntarily to expand beyond mandatory requirements and address broader sustainability issues. This dual approach helps organisations strengthen stakeholder trust, demonstrate long-term sustainability strategies, and stay competitive in domestic and international markets.
Step-by-Step Guide to Improving ESG Reporting
Improve your ESG reporting with the following steps:
Step 1: Define Material ESG Topics
Boards should begin by identifying which ESG issues are truly material to the organisation’s long-term success and stakeholder trust. Material issues often vary by industry. For example, climate risk may be critical for energy companies, while supply chain practices are more relevant for retail.
Boards can use tools like materiality matrices, peer benchmarking, and stakeholder engagement (through surveys, interviews, or roundtables) to prioritise the issues that matter most. Engaging directly with investors, employees, regulators, and customers ensures the board’s ESG agenda reflects external expectations and internal strategic priorities.
Step 2: Align ESG Metrics With Frameworks and Standards
Once material topics are clear, boards should align reporting with recognised frameworks. In Australia, widely used standards include the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), and the Global Reporting Initiative (GRI). Emerging international frameworks such as the ISSB are also gaining traction. Alignment with these frameworks ensures data is consistent, comparable, and credible, helping investors and regulators assess performance against global benchmarks.
Step 3: Establish Reliable Data Collection and Validation Processes
Accurate ESG reporting depends on strong internal processes for data collection, validation, and oversight. Boards should ensure management has systems in place to capture key ESG metrics across departments. Independent validation, whether through internal audit teams or third-party assurance providers, strengthens reliability.
Step 4: Review and Approve ESG Reports at the Board Level
Before reports are published, boards must critically review them to ensure completeness, accuracy, and alignment with the organisation’s strategy. This includes assessing whether disclosures address all material issues, risks are transparently presented, and commitments are backed by measurable progress.
Step 5: Communicate ESG Performance Transparently
Transparent communication matters when communicating ESG performance. Best practices include using plain language and providing year-over-year comparisons. Boards should also ensure consistency between what’s disclosed externally and what’s prioritised internally, so ESG messaging aligns with strategy and avoids reputational risk.
Common Mistakes to Avoid in ESG Reporting
There are some common mistakes that are often seen in ESG reporting. These include:
- Inconsistent data and a lack of comparability
- Greenwashing and lack of transparency
- Overlooking materiality assessments and stakeholder engagement
- Difficulty measuring and quantifying qualitative factors
- Treating ESG as a separate or peripheral function
- Lack of continuous improvement
- Overcommitment and underdelivery
When stakeholders perceive ESG reporting as unreliable, incomplete, or overstated, boards risk eroding investor confidence, attracting regulatory scrutiny, and weakening public trust. Strong governance requires addressing these pitfalls head-on to ensure ESG disclosures are accurate, transparent, and trusted.
Boards that want to strengthen their ESG expertise can also look into professional training or market insights. For example, our list of the 5 best ESG certifications in Australia highlights programs that help directors build ESG reporting skills.
How OnBoard Helps Boards Improve ESG Reporting
Effective ESG reporting requires precise recordkeeping and comprehensive reporting capabilities. A board portal platform like OnBoard empowers executive leadership and their boards with the tools to streamline ESG reporting and improve accuracy. OnBoard offers the following advantages when it comes to ESG reporting:
- Centralises ESG documentation for easy access to reports, policies, and data across board and committee meetings.
- Tracks ESG discussions and decisions with time-stamped audit trails, ensuring accountability and transparency.
- Enables secure collaboration between board members, ESG committees, and executive teams to review draft reports and disclosures.
- Supports version control and document approval workflows to maintain accuracy and oversight during ESG report development.
- Integrates with board calendars and agendas, allowing ESG reporting to become a recurring and trackable boardroom priority.
- Provides customisable dashboards and annotations, helping directors visualise ESG performance metrics and trends.
- Ensures compliance readiness by housing all ESG-related records in one governance-secure platform.
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About The Author
- Darren McCullagh is Marketing Operations Manager at OnBoard and an experienced B2B SaaS marketer with over eight years in international demand generation, marketing operations, and campaign execution. He specialises in developing and scaling multi-channel programmes across EMEA and APAC, bridging sales and marketing, and enhancing campaign performance. Darren lives in the North West of Ireland.
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