Australia’s largest companies are spending billions collectively on compliance with climate disclosure obligations, but experts warn a ‘compliance at all costs’ approach could halt innovation and slow the progress to net zero.
More than 5,000 Group 2 and 3 organisations (mid-sized and large entities that meet specific revenue, asset or employee thresholds under Australia’s new climate reporting framework) will be legally required to measure, report and mitigate their climate risk in line with Australian Sustainability Reporting Standards (ASRS) and AASB S2 climate-related disclosures.
Treasury estimates transition costs will be up to $1.3 million per organisation, with ongoing reporting costs of up to $700,000 annually.
These funds are diverting potential investment in sustainability efforts, new technology and skills development and causing a compliance burden on corporate climate action, according to Edge Impact, an award-winning B Corp certified global sustainability consultancy.
Edge Impact CEO, Alison Rowe, said it’s great to see climate hard-wired into the economy however businesses are starting to redirect sustainability budgets into disclosure and reporting.
“Even some of the most proactive companies have started to shelve innovation programs to keep up with reporting requirements. That’s an unintended consequence of mandatory reporting, as compliance was meant to accelerate climate action, not suffocate it,” she said.
To solve this, Edge Impact, which is part of the global sustainability group RSK, has partnered with cleantech firm Greener to a purpose-built compliance platform to help scale efficiency and cut climate reporting timelines from years to months.
The solution, which has been developed according to Greener’s datasets and bespoke AI models and combined with Edge Impact’s regulatory expertise, is designed to lower preparation expenses and free up capital for reinvestment into genuine decarbonisation initiatives.
The platform is open and accessible to other consultants and businesses across all sectors, providing an industry-wide tool to accelerate climate action and simplify compliance.
Early adopter pilots have identified 23 per cent faster emissions measurement cycles, with some clients forecasting savings of up to 35 per cent by year’s end, according to Greener CEO, Tom Ferrier.
“Our goal is to provide teams with the technology to dramatically scale their impact,” he said.
“By automating complex, labour-intensive reporting tasks and delivering audit-ready outputs, we’re enabling Edge Impact’s consultants to work faster and deliver deeper sustainability insights. In many cases, this will be at a much lower cost than what’s been forecast by the government.”
Edge Impact estimates that more than 80 per cent of Australian companies still lack mature sustainability frameworks and many are now rushing to build reporting infrastructure from scratch by the 2026 deadline.
For others that are more advanced in their ESG journey, the problem is inverted, with the labour-intensive disclosure obligations cutting down the time and capital for scaling climate solutions.
It’s a dynamic Rowe likens to the introduction of the Modern Slavery Act, when many organisations ticked the boxes for the law but took time to implement substantive change. “With climate change, we don't have the luxury of five years for impact to follow compliance,” she said.
“The next 18 months will see whether Australia gets ahead or stuck in the admin.
“The businesses that will thrive in the coming decade are the ones that look beyond the checkbox. They will take compliance as a launching pad to unleash capital, develop capability and drive the innovation Australia must have to achieve its aspirations.”