A new study by NetNada has found that most Australian organisations preparing for mandatory climate disclosure are focusing on the wrong areas.
While companies are gaining confidence in emissions measurement, thanks to growing familiarity with carbon accounting, the real gaps lie elsewhere. According to early findings from NetNada’s License to Operate Report, governance and strategy remain the least prepared pillars under the AASB S2 climate reporting framework.
These insights are based on an in-depth analysis of 50+ organisations and 24 interviews with sustainability leaders, ESG consultants, and corporate executives across Groups 1, 2, and 3.
The findings highlight a critical issue in how organisations are preparing for climate disclosure, and serve as a wake-up call for those relying on emissions data alone to demonstrate climate readiness.
Governance and Strategy: The Hidden Compliance Risks
NetNada’s research reveals that:
- Most companies lack formal governance structures to oversee climate-related issues, including defined responsibilities for board and executive teams.
- Only 33% report feeling ready to disclose their climate strategy, meaning the majority have not yet documented their approach to climate-related risks, opportunities, and transition planning.
It is with these that we realize... Climate reporting isn’t just about emissions. It’s about the processes, people, and decisions behind them.
The AASB S2 standard requires companies to disclose not only emissions, but also governance oversight and long-term climate strategy. Without this, disclosures risk being non-compliant or incomplete—exposing businesses to reputational and legal risk.
Board and Executive Engagement is the Critical Success Factor
In every single interview conducted for the report, one theme stood out:
100% of participants cited board engagement as both the most difficult and the most essential element of successful climate disclosure.
The challenge lies in upskilling senior leaders, establishing oversight structures, and ensuring finance and sustainability teams collaborate effectively, particularly as CFOs will be responsible for signing off on climate disclosures under AASB S2.
Companies that treat board involvement as an afterthought will find it increasingly difficult to meet compliance requirements, build stakeholder trust, or secure third-party assurance.
“Reporting is the process. Sustainability is the outcome.”
— Ella Waite, Sustainability Manager at Avant
Organisations that integrate climate into their governance structures, and document it thoroughly, are better positioned to manage risk, attract investment, and lead on sustainability.
About the Report
The License to Operate Report draws from a robust dataset of Australian businesses navigating the shift to AASB S2. It offers:
- Detailed analysis of the four reporting pillars: Governance, Strategy, Risk Management, and Metrics & Targets
- Common pain points identified across industries and company sizes
- Insights into assurance readiness, technology adoption, and skill gaps
- Recommendations for improving board engagement and internal alignment
The report is designed for:
- Enterprise executives responding to new disclosure mandates
- Sustainability professionals driving internal change
- ESG consultants and auditors supporting implementation and assurance
Coming Soon: Full Report Access
The full License to Operate Report will be released later this month.
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