Australian CFOs Face Pressure from Climate Reporting Reforms

Australian CFOs are working to meet new mandatory climate reporting rules that aim to improve corporate transparency, but the shift risks putting pressure on infrastructure and employee skills. With over 60% of CFOs now taking charge of climate disclosures, only 15% are leveraging this as a competitive advantage. The rest are still building up the capacity to meet a rapidly evolving set of regulations.

Right now, companies across Australia are adapting to upcoming climate-related financial disclosures, which are soon becoming law. These rules are part of a broader global shift to integrate environmental concerns into business decision-making, but for many finance leaders, it's still uncharted territory. The changes coincide with evolving international standards, like the EU’s CSRD reforms, adding complexity for global organisations.

The latest research shows CFOs are willing but still unsure how to implement climate reporting effectively. Most already have strong finance, risk and compliance teams, but those functions weren’t built with climate in mind. The challenge now is how to retrofit existing systems and embed climate metrics into governance and risk frameworks without duplicating effort or stalling operations.

Although some financial leaders are taking a cautious, wait-and-see approach due to uncertainty in timelines and policy shifts, momentum towards global climate accountability continues to grow. Australia finds itself among the first movers in the space, meaning early adopters have the opportunity to shape best practices and gain long-term cost and brand advantages.

One practical first step is to build on current systems. CFOs can fold climate metrics into enterprise risk registers or broader governance reporting, rather than start from zero. Using existing digital transformation projects as a base makes this more achievable, allowing organisations to avoid excessive costs or delays.

Another strategy is to break the larger task into manageable chunks. Tackling climate transparency in a specific part of the business, such as a pilot initiative with a sample supplier group, can make it easier to gain internal alignment, prove the value of sustainability KPIs and reduce resistance from teams unfamiliar with environmental metrics.

Technology offers further upside, especially in handling the data crunch. Automated emissions calculators and AI tools can dramatically cut down manual work and help leaders zero in on significant insights faster. Teams dealing with complex risk data across regions or assets may find that deploying point solutions is a cost-effective way to build capacity without overhauling everything.

Ultimately, the quality of results depends on the quality of data being processed. Robust climate reporting relies on consistent, well-organised data from across a business’s operations and geographies. For CFOs, investing now in better data aggregation like spreadsheets is key to ensuring future-ready reporting that supports both regulatory compliance and strategic growth.

Source: The Australian, ASIC, Allens.