The strategic role of voluntary sustainability reporting frameworks
The strategic role of voluntary sustainability reporting frameworks
Our sustainability webinar series breaks down the complex world of sustainability, making it a little easier for you to understand the basics and begin driving change within your organisation.
In this webinar, Aletta Boshoff discusses the potential benefits of voluntarily implementing sustainability reporting and the approach your organisation could take if this is of interest.
Understanding the importance of sustainability in Australia today
Australia is now leading the way on sustainability, thanks to the introduction of mandatory climate reporting from 1 January 2025. These significant steps align us with global leaders like Europe and New Zealand, who have been ahead in this crucial area.
While many not-for-profits and smaller entities might not be required to report on sustainability, many are choosing to do so as a strategic advantage. Embracing sustainability initiatives not only demonstrates a commitment to the environment and society but also brings tangible business benefits, making it a smart and forward-thinking move for any organisation.
So, what is voluntary reporting?
Voluntary sustainability reporting is when businesses choose to disclose their Environmental, Social and Governance (ESG) performance beyond mandatory regulatory requirements.
Through this reporting, organisations can showcase their initiatives in areas such as reducing carbon footprints, promoting fair labour practices, enhancing community engagement, and ensuring ethical governance. These reports can follow established frameworks, or incorporate relevant aspects of one or more frameworks to communicate selected sustainability initiatives important to their stakeholders.
Optional reporting frameworks for sustainability
Several voluntary reporting frameworks are available that organisations can adopt to support their sustainability reporting. These frameworks offer flexibility and can be tailored to meet the specific needs of your organisation. Some focus more on the financial impacts of sustainability initiatives and others on non-financial impacts.
Frameworks with a financial focus
AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information
With much recent talk about mandatory climate reporting, what about organisations that want to report voluntarily? AASB S1 is a voluntary Australian standard that enables this. It shares the same pillars as the mandatory AASB S2 Climate-related Disclosures, covering governance, strategy, risk management, metrics, and targets across all aspects of sustainability.
By adopting AASB S1, organisations can address stakeholder interests and potentially gain financial benefits, such as improved revenues, more customers, or cheaper debt financing.
“It’s likely that AASB S1 will be the next mandatory standard from the Australian Accounting Standards Board. It’s important to prepare for this, especially given its financial focus.”
- Aletta Boshoff, National Sustainability Leader
Task Force on Climate-related Financial Disclosures (TCFD)
The TCFD recommendations remain voluntary for entities outside Groups 1, 2, and 3, but they should not be overlooked. While Groups 1, 2, and 3 will incorporate these recommendations when applying AASB S2, the TCFD still offers valuable guidance for voluntary climate-related reporting by entities outside Groups 1, 2 and 3. This framework emphasises financial aspects and can help organisations effectively address climate-related risks and opportunities.
By voluntarily adopting the TCFD recommendations, organisations can enhance their sustainability reporting, potentially improving stakeholder engagement and generating financial benefits.
We offer a comprehensive TCFD checklist that consolidates the 11 recommended disclosures and sector-specific guidance. This tool helps organisations perform a gap analysis before beginning their TCFD reporting.
Frameworks with a non-financial focus
United Nations Sustainable Development Goals
These goals provide a shared blueprint for peace and prosperity for people and the planet, now and into the future. At their heart are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries—developed and developing—in a global partnership.
Source: Communications materials - United Nations Sustainable Development
You could consider which of these goals aligns with your stakeholders’ priorities and use this to guide your initial sustainability reporting.
World Economic Forum’s International Business Council
Established as a trusted, neutral platform for businesses dedicated to driving alignment toward a global baseline for sustainability reporting.
In 2022, BDO Australia aligned with these metrics and disclosure frameworks and began voluntarily reporting our sustainability efforts, applying this framework to three years of our sustainability reporting.
Global Reporting Initiative (GRI) standards
This widely used framework for sustainability reporting covers a wide range of ESG issues and helps organisations communicate their impact to stakeholders.
Source: A Short Introduction to the GRI Standards (page 3)
These are just some of the voluntary frameworks for sustainability reporting that focus on either financial or non-financial aspects.
If you need help selecting a framework to tailor your organisation’s sustainability reporting, please contact us.
Australia’s path to European Sustainability Reporting Standards
Australia’s approach to sustainability reporting is closely linked to Europe’s established framework of 12 European Sustainability Reporting Standards (ESRS). By applying AASB S1 and S2, along with the relevant GRI standards, Australia can align its reporting practices with European standards. The International Sustainability Standards Board has published a mapping of these standards, highlighting their interoperability.
While Europe has made significant progress with 12 standards, Australia is still in the process of implementing AASB S2. This phased approach allows for gradual alignment with European standards, acknowledging the rapid pace of Europe’s advancements, and the need for the rest of the world to catch up.
How to create your voluntary sustainability report with our checklist
Embarking on a sustainability journey can seem daunting, especially with the myriad of voluntary frameworks available. However, it's important to note that if you're pursuing voluntary sustainability reporting, you're not mandated to use any specific framework. You have the flexibility to develop your own approach.
While these frameworks can provide valuable guidance and insights, you don't need to declare compliance with them. Instead, use them as research tools to inform your strategy.
For businesses outside mandatory sustainability reporting, embracing sustainability can offer significant strategic benefits. To start, review what you currently have in place across all related Environmental, Social, and Governance (ESG) aspects. Our checklist will help you identify and build upon your existing efforts, guiding you through the process of enhancing your sustainability practices.
Get support
There have been many conversations lately about the relevance of ESG and sustainability, with Trump making firm comments that seem to downplay the importance of climate reporting. If there was any doubt about the commitment of organisations in the US and Europe to continue their voluntary sustainability reporting efforts, our article, shows that sustainability remains a top priority for CFOs. This is highlighted in the outcomes of the 2025 CFO Sustainability Outlook.
We’ve got a national team of experts who can partner with you to simplify any aspect of sustainability related to sustainability and decarbonisation strategies and reporting, carbon accounting and assurance. Contact us.