ESG reporting update

ESG

ESG reporting update

Navigating the changing ESG reporting landscape in the Australian Property sector

James Cahill / 9 April, 2024

The last decade has seen significant growth in Environmental, Social and Governance (ESG) reporting. The 2022 ACSI survey revealed that 70% of ASX200 companies now publish ‘detailed’ sustainability information, almost double the rate from ten years ago [1].  Only 5% of ASX200 companies provide no sustainability disclosure at all.

This can be largely attributed to two major events: the 2015 Paris Agreement on Climate Change, which aims to limit global average temperature increases, as well as the introduction of the UN Sustainable Development Goals, which called on governments and organisations to end poverty, improve health and education, reduce inequality, and combat climate change.

“Capital markets can now access more sustainability-related information than ever before. However, the overabundance of voluntary reporting frameworks and standards means that companies are reporting on ESG issues in many different ways. This has spurred investors to call for greater standardisation of sustainability reporting so they can access more consistent and comparable information,” according to James Cahill, Senior ESG Manager at Aliro Group.

The IFRS Foundation is seeking to solve this problem with the International Sustainability Standards Board (ISSB) Standards. These will consolidate several existing reporting frameworks, including the TCFD Recommendations, the SASB Standards, and the Integrated Reporting Framework. This represents one of the most significant shifts in ESG reporting in recent years.

So what does this mean for Australian property companies?

The federal government has recently introduced a Bill which proposes the establishment of ISSB-aligned mandatory climate reporting standards in Australia. These standards are currently under development by the Australian Accounting Standards Board (‘AASB’) and are planned to be phased in from 1 January 2025. If enacted, several large property groups will soon be required to report on complex topics such as climate transition scenarios, as well as emerging ESG data sets such as Scope 3 emissions.

“Based on released guidance, it is likely that smaller Australian property companies, including Aliro Group, will not be legally required to report against the AASB Standards until at least 2027. However, due to our commitment to ESG excellence and transparent disclosure, we are proactively preparing to join our listed peers in the first phases of mandatory reporting. This has involved accelerating our work on Greenhouse Gas (GHG) emissions measurement and target setting, while also elevating our approach to climate risk management.”, added Cahill.

Download a copy of Aliro Group’s latest Sustainability Report.

For more, contact info@aliro.com.au or follow Aliro Group’s LinkedIn page for the next 2024 Sustainability Report.

[1] Australian Council of Superannuation Investors (ACSI) 2022 Survey

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