Climate reporting is exposing a problem bigger than emissions

Many Australian businesses are entering the next phase of climate reporting in survival mode.

Inflation remains above target, energy and transport costs are still putting pressure on operating budgets, and economic growth has been modest.

Annual inflation was 4.2 per cent in April 2026 and GDP grew by 0.3 per cent in the March quarter. For business leaders, those numbers are not abstract. They show up in energy bills, supply contracts, insurance costs, capital decisions and customer demand.

Against that backdrop, it is understandable that some organisations look at the new, mandatory Australian Sustainability Reporting Standards and see another cost.

That view is too narrow. The organisations that gain the most from ASRS will be those that use it to understand both opportunities and risks of the future. Climate reporting is not only a disclosure exercise. It is a test of whether an organisation has the data, systems and internal coordination needed to manage risk, reduce waste and make better decisions.

That is where many businesses will struggle.

The problem is not that organisations lack ambition. Schneider Electric’s recent Energy Tech Pulse survey found half of Australian business leaders support mandatory climate-related disclosure, and three-quarters say their organisation is at least somewhat prepared. But only one in eight describe themselves as fully ready.

Many organisations still rely on spreadsheets, fragmented systems and manual processes to manage climate and energy data. These tools may help produce a report, but they do not provide the visibility needed to improve performance. A spreadsheet can show what happened last quarter. It is much harder for it to show where energy is being wasted, which assets are underperforming, or how future climate and energy risks could affect operations.

ASRS will force organisations to ask practical questions. Where is energy being used? Which facilities, processes or suppliers create the greatest exposure? Which parts of the business are vulnerable to heat, extreme weather, grid constraints or rising energy prices? Where could efficiency improvements reduce both emissions and cost?

For many leaders, the first valuable outcome will be a clearer understanding of what is at stake for the business. The process of working towards compliance can reveal operational, financial and strategic exposure.

That shift matters because sustainability is ultimately about an organisation’s ability to keep operating, adapting and delivering value over time. It depends on financial durability, operational resilience and the capacity to respond to a changing economy. Energy is central to all three.

Our research shows energy costs are one of the leading external challenges for Australian organisations. Four in ten businesses say energy costs or supply issues have caused them to delay or miss growth opportunities. Nearly half expect continued energy pressures to reduce profitability or increase operating costs.

Those figures should change how businesses think about climate reporting.

If energy costs are affecting margins, delaying projects and constraining growth, then better energy data becomes a business requirement. The same data required to support credible disclosure can also help organisations identify inefficiencies, improve procurement, optimise assets and reduce consumption.

This is where Energy Technology becomes critical.

Energy Technology brings together electrification, automation and digitalisation. It gives businesses clearer visibility across energy use, assets, systems and performance, turning operational data into decisions that can reduce waste, improve resilience and support more disciplined investment.

For sustainability teams, this matters because they cannot deliver ASRS alone. Climate reporting depends on data from finance, procurement, operations, facilities, energy managers, risk teams and suppliers. If those teams are working from disconnected systems, reporting becomes slow, manual and exposed to error.

A stronger digital foundation helps create a single view of performance and allows organisations to move from retrospective reporting to active management. That is the difference between knowing energy costs have risen, and understanding where, why and what can be done about it.

The skills challenge also cannot be ignored. Almost three in ten Australian organisations say a shortfall in staff capability is their biggest obstacle to climate disclosure progress, and 30 per cent say they lack the internal skills required to meet new climate disclosure and compliance requirements.

That does not mean every business needs to build a large in-house sustainability team. It does mean businesses need clear governance, reliable systems and access to the right technical expertise.

The medium-term opportunity is significant. Businesses that engage seriously with ASRS can gain a clearer view of how climate, energy and operational risks and opportunities affect their future. Those that use the process to improve data quality and invest in the right Energy Technology can reduce energy consumption, lower costs and strengthen resilience.

In the short term, many organisations will understandably focus on meeting the next deadline. In the medium term, the leaders will be those that treat climate reporting as a tool to understand their operations more deeply.

They will know where energy is being used, where risk is concentrated, and where investment can deliver both sustainability and financial value.

That is the real test of sustainability reporting. It will not simply show which businesses can comply. It will show which businesses have the ability to adapt and sustain themselves into the future.

Image credit: iStock.com/Dilok Klaisataporn