Understanding Sustainability Reporting in Australia and How Your Accountant Can Help

What is Sustainability Reporting?

Sustainability reporting is like a special report a business makes. It’s not about how much money you made, but how your business affects the world around it. We talk about Environmental, Social, and Governance (ESG) reporting. Understanding Sustainability Reporting in Australia is becoming very important for the benefit of the community for now and in the future.

• Environmental means things like how much energy you use, how much waste you make, and your carbon footprint. Are you being “green”?
• Social is about how you treat your staff, your customers, and the community. Are you fair? Do you help people?
• Governance is about how your company is run. Is it honest? Are the rules clear?

In Australia, these things are becoming more than just “nice to do.” From 1 January 2025, some larger businesses will mandatorily need to report on their climate impact or their footprint. This is called climate-related financial disclosures. How your business directly or indirectly contributes to climate change. It is big news! Even if your business is small, it can still be part of the supply chain for a big company, so it might affect you too. Think about Scope 3 emissions – these are the indirect emissions from your supply chain. So, even small businesses should start thinking about carbon accounting!

Why Do We Need Sustainability Reporting Now?

There are many reasons why sustainability reporting is not just a trend but a must-do:

• Rules are Changing: The Australian government, through bodies like ASIC (Australian Securities and Investments Commission) and AASB (Australian Accounting Standards Board), is bringing in new rules. They want more transparency from businesses. The Australian Sustainability Reporting Standards (ASRS) are coming, and they’re based on international standards (IFRS S1 and S2). So, it’s about staying on the right side of the law.
• Investors Care: More and more, people who put money into businesses (investors) want to know that companies are doing good things, not just making money. They look for good ESG performance. It can even help you get better loans from banks!
• Customers Care: People like you and me, we want to buy from businesses that are responsible. If you show you care about the environment and society, customers will trust you more and choose you over others. It’s good for your brand reputation!
• Save Money: Sometimes, when you start looking at your energy use or waste, you find ways to do things better and actually save money. Less waste, less energy, means less cost! It helps with operational efficiency.
• Future Proofing: The world is changing. Climate change is a real thing. Businesses that plan for these changes and are sustainable are stronger for the future. It’s about risk management and seeing opportunities.

How to Start with Sustainability Reporting?

It might sound a bit scary, but you can start small. Here are some steps:

1. Understand Your Impact: What does your business do that affects the environment or people? Think about your electricity, water, waste, and even how you get materials.
2. Set Goals: What can you improve? Maybe reduce your electricity bill by 10%? Or start recycling more? Make them real goals.
3. Track Everything: You need to keep records. How much energy did you use last month? How much waste? This is where good data collection is key for sustainability accounting.
4. Make Changes: Put your plans into action. Switch to LED lights, encourage staff to save water, or look for suppliers who are also good for the environment.
5. Talk About It: Once you do good things, tell people! This is the reporting part. Be honest about your progress.

For small businesses, while mandatory reporting might not be for you right now, thinking about these things is super smart. ASIC has some good info on sustainability reporting for small business that you can check out.

How Your Accountant Can Be Your Sustainability Reporting Partner?

You might think accountants are just for numbers and tax forms. But they are much more! With green accounting becoming vital, your accountant can be a huge help with sustainability reporting.

• Data, Data, Data! Accountants are masters of numbers. They can help you figure out what data you need to collect for your ESG reporting, and how to track it properly. They can help set up systems for carbon accounting and measure your emissions.
• Understanding the Rules: The new Australian rules for sustainability reporting can be complex. Your accountant is trained in understanding regulations and can tell you what you need to do to comply with ASRS and avoid problems.
• Finding Opportunities: An accountant can help you see where being more sustainable can actually save you money or create new business chances. Maybe investing in solar panels has a good return? They can help with financial reporting that includes sustainability metrics.
• Risk Management: They can help you understand the financial risks related to climate change or not being sustainable. For example, if your suppliers are not sustainable, that’s a risk.
• Preparing the Reports: When it’s time to write that sustainability report, your accountant can help put all the information together in a clear, easy-to-understand way, making sure it follows the right sustainability accounting standards which are supported with numbers. This can often be part of an integrated reporting approach, where financial and non-financial info are linked.
• Strategy Advice: Your Accountant can offer ESG advisory services and help you build corporate social responsibility (CSR) reporting supported by numbers into your overall business strategy.

So, don’t keep your accountant just for your tax return! Talk to them about your sustainability goals. They can be a great partner on your journey to being a more sustainable business.

Where to Find More Help and Information

There are various sources that you can refer to for more information!

• ASIC (Australian Securities and Investments Commission): They have a lot of information about the new rules.
• ASIC Regulatory Guide 280 Sustainability Reporting: https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-280-sustainability-reporting/
  • Sustainability Reporting for Small Business: https://www.asic.gov.au/regulatory-resources/sustainability-reporting/sustainability-reporting-for-small-business/
• AASB (Australian Accounting Standards Board): They are the ones making the specific standards for Australia. You can find their standards at https://standards.aasb.gov.au/
• Chartered Accountants Australia and New Zealand: They also have resources on integrated reporting and sustainability for accountants. (You can find their website easily with a quick search).
• For our clients at SEED PLUS: You can also check out our site for more general accounting insights at [www.seedplusaccounting.com.au]

Disclaimer

This blog post is for general information only. It’s not financial or legal advice. Every business is different, so what’s right for one might not be right for another. You should always get advice specific to your own situation from a qualified professional. We are giving general information only.

Need a Hand with Your Sustainability Reporting, Green Accounting, Carbon Accounting, or Setting up your System?

SEED PLUS is located in Rowville Melbourne, Victoria, and want to talk more about sustainability reporting, ESG advisory, carbon accounting, green accounting or anything else related to making your business more sustainable, then SEED PLUS can help. We’re an experienced Accounting Practice, operating more than 15 years, and we understand the numbers and the rules.

Contact SEED PLUS today! Let’s make your business shine, not just in profits, but in positive impact on the socity, environment and economy too.

Contact our office: (03) 6153 0180 to discuss your scenario.