Evidence over intention: what the first wave of climate reporting reveals

For Australia's climate-related financial disclosure (CRFD) regime, which commenced on 1 January 2025, global law firm Allens found that many reporting entities “began by undertaking a gap analysis between current voluntary reporting and incoming mandatory reporting requirements under the CRFD, with next steps including scoping pre-assurance, scenario analysis and methodology updates”.

Within this first wave, regulators expected entities to avoid greenwashing in their climate commitment statements, with factual, substantiated, and evidence-based claims.

BDO said that this first wave of reports revealed how well integration is unfolding – it found that in many cases, climate risk and opportunity are still being reported alongside strategy.

In its Global Climate Action Barometer 2025, EY found that although 64 per cent of companies reported having a climate reporting transition plan, most either stagnated or regressed on their prior commitments.

Further, EY’s data revealed that nearly two in three (65 per cent) companies with net-zero targets appeared to lack actionable transition plans.

BDO noted that although many companies have net-zero targets, these targets must be “reflected in capital allocation, embedded in operating assumptions and tested against downside scenarios.”

“Climate disclosure is no longer about what companies intend to do. It’s increasingly about what their numbers already say,” BDO said.

BDO also said that investors would be able to distinguish between organisations with climate information generated mainly for disclosure and organisations that use information for “strategy-setting, capital planning, and risk management processes,” which would become clearer as reporting matures.

Through implementing systems that can produce “decision-grade financial information that informs planning and investment choices,” organisations ensure that their climate disclosure is high-quality, BDO said.

It concluded that boards and executives focus on building systems, governance and analysis that stand up to scrutiny as well as for disclosure to strengthen the link between climate reporting and strategic decision-making.