What does good governance look like when responding to the Australian Sustainability Reporting Standards (ASRS)

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Element 

Commentary 

1 

A clear governance framework 

Establish a governance framework that emphasises climate-related responsibilities and integrates them into the overall governance structure. 

Call to action for companies: ensure a clear delegation of responsibilities among board members and integrate into policies 

2 

Risk management systems 

Ensure both physical and transition related risks are adequately identified, assessed and managed. 

Call to action for companies: review and approve the organisation’s risk management framework to ensure it includes specific provisions for climate-related risks and that regular reporting mechanisms are established 

Note: Physical risks refer to the direct impacts of climate change on a company's operations and infrastructure, while transition risks involve the challenges and costs associated with adapting to a low-carbon economy, including regulatory, technological, and market shifts. 

3 

Create a plan to deliver transparent disclosures 

Ensure the organisation complies with applicable disclosure requirements and foster a culture of transparency and accountability in reporting. 

Call to action for companies: direct management to prepare comprehensive climate-related disclosures that accurately reflect the organisation’s governance, risk management processes, and climate-related performance. 

4 

Establish a climate-related stakeholder engagement matrix 

Lead efforts in engaging with key stakeholders, including investors, customers and the community, regarding the organisation’s climate strategies and performance.  

Call to action for companies: actively participate in discussions and initiatives that foster stakeholder engagement on climate issues, ensuring that feedback is considered in strategic decision-making. 

5 

Publish robust sustainability strategies  

The Board should ensure that the organisation’s sustainability strategy aligns with its overall business objectives and incorporates climate targets. 

Call to action for companies: participate in the strategic planning process to ensure climate objectives are prioritised and incorporated into the overall organisational strategy 

6 

Training and capacity building 

Directors should recognise the importance of continuous learning regarding climate-related issues, such as understanding the evolving landscape of regulations, risks and opportunities that could impact the organisation. 

Call to action for companies: encourage board training sessions on climate governance and related issues to make informed decisions 

7 

Set performance metrics and KPIs 

Establish clear performance metrics and KPIs related to climate initiatives. 

Call to action for companies: regularly review and assess the effectiveness of climate-related KPIs, ensuring they align with the organisation’s overall objectives and strategies 

8

Monitor and report both internally and to the market 

Ensure the organisation has robust systems in place for monitoring progress on climate-related initiatives. 

Call to action for companies: schedule regular reviews of climate-related reporting and ensure that findings are discussed in board meetings to keep all members informed and engaged.