The ripple effect of the incoming ASRS climate standards: how businesses of all sizes are eventually impacted - 100% Renewables

The ripple effect of the incoming ASRS climate standards: how businesses of all sizes are eventually impacted

In this article, we’re analysing the ASRS ripple effect and its transformative impact across all tiers of the business ecosystem.

Join Barbara Albert, our Co-CEO, as she guides you through how ASRS extends beyond direct compliance to influence businesses of every size within the supply chain

Previously in the series

Before looking at how ASRS requirements will flow through the economy, ensure you’re up to date with our discussion on whether Australian companies are ready to report under IFRS/ASRS.

The climate reporting shift

The proposed Australian Sustainability Reporting Standards aren’t just a set of guidelines for the big players; they are a catalyst for a climate reporting shift throughout the economy. Let’s explore how this unfolds at various levels.

Figure 1: Timelines under Australia's mandatory climate disclosures legislation
Figure 1: Timelines under Australia’s mandatory climate disclosures legislation

Groups 1 and 2

Starting with large corporations in Groups 1 and 2, the companies that have to report first under ASRS. Their need to provide comprehensive climate disclosures will require a closer look into their supply chains. It’s not just about their own operations anymore; it’s about ensuring their suppliers, possibly your business, align with climate-related reporting. This demand for data will inevitably lead to a push for enhanced sustainability practices, with larger businesses urging suppliers to develop their carbon footprint, set ambitious climate targets and craft decarbonisation strategies.

Group 3

Mid-sized businesses, or Group 3; you might have a later start date, but the ripple reaches you sooner. Your larger clients won’t wait; they’ll need your emissions data to complete their puzzle – this might be your scope 1 and 2 emissions, or it could be the emissions of your products and services, or both. This early call to action means gearing up now, understanding your carbon footprint, and starting on a path towards climate action sooner rather than later.

Smaller suppliers

And for the smaller suppliers out there, the wave of change is heading your way too. Being part of the supply chain to larger companies means your emissions data becomes a piece of their reporting. It’s a push towards climate reporting that spans beyond direct regulatory requirements, encouraging even smaller businesses to adopt greener practices.

Let’s have a look at how the proposed mandatory climate reporting will flow through the economy with this graphic that we have created.

Figure 2: How climate reporting will flow through the economy
Figure 2: How mandatory climate reporting will flow through the economy

Your B2B customers, especially larger ones, face many requirements for disclosing their carbon footprint, including government regulations such as the incoming mandatory climate reporting standards. At this stage in their decarbonisation journey, your large customers are most likely reporting their scope 1 carbon footprint and scope 2 emissions.

However, to be able to accurately report their scope 3 emissions, your customers will have to engage with their supply chains to get this carbon footprint. They will need to ask their suppliers for their carbon footprint, and suppliers will need to respond back with the required information. They may ask for your scope 1 and 2 carbon footprint, but they may also want to know the carbon footprint of your products or services that you supply to them.

Similarly, larger suppliers may, in turn, ask their suppliers, which could be big or small, for their carbon footprint. This is how even small and medium-sized organisations that don’t have to mandatorily report under ASRS will indirectly be affected by it.

Consider the evolving dynamics of business relationships. The depth of scope 1, 2, and especially material scope 3 emissions reporting demands a new level of transparency and cooperation. It’s about creating a supply chain where climate action and accountability are at the core, transforming how businesses interact and depend on each other.

What suppliers to ASRS reporters should be working on

If you are a supplier to an ASRS reporter, here are your next steps so that you are prepared when you are being asked to supply information:

1️⃣Develop your scope 1 and scope 2 carbon footprint

2️⃣Consider developing your full carbon footprint, inclusive of your scope 3s

3️⃣Consider developing the carbon footprint of your products and services

4️⃣Look for emissions reduction opportunities

5️⃣Consider setting climate targets in alignment with your customers

6️⃣Think about how you can position your business by telling a compelling story that is free of greenwashing

Conclusion

From the giants of industry down to niche suppliers, the proposed ASRS standards set a precedent for climate action that everyone plays a part in. At 100% Renewables, we’re here to help you navigate these waters, ensuring your business not only meets the ASRS requirements but emerges as a leader in climate action. Whether it’s providing carbon footprint assessments, identifying climate-related risks and opportunities, establishing targets, or developing transition plans, we’re dedicated to supporting you every step of the way.

Next in the series

Join us as we continue to unravel the implications of ASRS and support your journey towards a sustainable future. Stay tuned for our next blog post, where we’ll discuss the steps you can take to get ready for climate-related reporting.

Our ASRS complimentary course

In our ongoing dedication to assist businesses in their sustainability endeavours, we’ve revamped this multi-part blog and video series into a complimentary online course. Alongside the video content, the course offers additional resources and quizzes designed to enhance your comprehension of the ASRS.

Kickstart your journey towards mastering the ASRS. Join now by following this link. Don’t hesitate to share this opportunity within your network to collectively advance the climate agenda.

Related Articles

Subscribe To Our
Net Zero Newsletter

Get monthly cutting edge energy, carbon and net-zero insights delivered to your inbox for free

Thousands of your peers are already reading it.

Just one more step...

Please enter your name & email to download for free