Common Australian Sustainability Reporting Standards (ASRS) pitfalls and how to avoid them

As mandatory ASRS climate disclosures take effect, many firms risk treating them as a compliance exercise. Here’s how to build credible, repeatable modelling that stands up to assurance. 

With the first ASRS disclosures now live, many firms are grappling with scenario analysis – one of the trickiest parts of climate reporting. Here are the common pitfalls we see, and how to avoid them. 

From 1 January 2025, climate-related financial disclosures became mandatory for Australia’s first reporting cohort under the Australian Sustainability Reporting Standards (ASRS). Those requirements sit in AASB S1 and AASB S2 and will be phased across three groups of entities. If you are in the first cohort, this is now an annual obligation, not a one-off project. The biggest risk is approaching ASRS modelling as a short-term compliance exercise rather than building a repeatable capability.

Risk 1: One-off climate scenarios that can’t be rerun or explained

Many firms commission data for their internal models in year one, only to find they have to start from scratch in year two. That’s expensive, inconsistent, and hard to assure. 

Best practice: Build processes for repeatability and consistency. 

Risk 2: Using global numbers with no local calibration

Relying on global scenarios (IEA, NGFS, IPCC) without tailoring them to Australian conditions or your firm’s exposures often yields results that are too generic. Aggregated GDP impacts overlook industry and region-specific risks where your real exposures lie. Models that don’t connect results to revenues, costs, or valuations will be hard to defend. 

Best practice: Anchor to global narratives but calibrate to local forecasts. Ensure transition and physical risk impacts feed directly into financial metrics such as cash flows, costs and valuations. 

Risk 3: Results shifting once assurance kicks in 

If your reported financial impacts change significantly when assurance kicks in, it signals weak foundations. Stakeholders may conclude that your disclosures were unreliable in year one, undermining confidence. 

Best practice: Design for reputability, credibility and assurance from the outset.