Be prepared for 2025 ESG reporting requirements

As of January 1st 2025, over 6,000 entities, including many ASX-listed companies, will be required to report under the new climate-related disclosure requirements. Described as a one-in-a-generation change, this is expected to alter current continuous disclosure obligations as well as substantially increase the quantity of information that must be sourced, verified, approved and disclosed. Along with ASIC Chair Joe Longo, Diolog recommends to not wait for the Australian Accounting Standards Board (AASB) to finalise the ESG requirements and rather, that you start preparing now. 

Key impacts

For many entities, the growing interest in environment, social, and governance (ESG) issues will change the nature of their financial reporting. Drafting these disclosures will require careful consideration by management and directors, as these climate disclosures will:

• Require a robust yet agile production and verification process.
• Need to be easily accessible to the public. 
• Undergo scrutiny from various stakeholder groups.
• Form a key part of the AGM agenda and company strategy.
• Demand a cross-functional response due to climate risk's complexity.
• Force a big uplift/upskill within organisations. 

How Diolog can help

The new requirements will demand rigorous data management, robust internal processes, and comprehensive reporting that aligns with international standards. Diolog is uniquely positioned to support you through this transition, ensuring that you not only comply with the new regulations but also capitalise on opportunities such as increased retail investor acquisition.

Streamlining data management and reporting

As you report your ESG efforts, understanding how stakeholders perceive your results is essential for building trust and credibility. Diolog’s platform not only helps you report ESG data but provides tools such as sentiment summaries to interpret feedback from your investors. This allows you to identify areas of improvement and make data-driven decisions to improve communication with your shareholders.

Support strategic decision-making

The transition to mandatory ESG reporting is not just a compliance exercise; it also presents an opportunity for you to increase your company’s credibility in the market. Diolog’s centralised platform will help you increase visibility of your company’s ESG strategies, by answering investor questions in real time and acting as a centralised place for all investor queries (such as ESG-related FAQs).This will show your operations align with Australia’s net-zero commitments and the global goals of the Paris Agreement. 

Enable cross-functional collaboration

As ESG reporting becomes more complex, it will require a coordinated response from multiple departments within your organisation. Diolog allows cross-functional collaboration, ensuring that all relevant team members - from directors to investor relations professionals - are aligned in your ESG disclosures. 

Ensure compliance and risk management

As seen through the Mercer case, compliance and accuracy are a must. Misleading or deceptive statements can have serious legal consequences such as fines or even delisting. Diolog’s platform includes tools such as a question registry, ensuring that all reports and communications are thoroughly vetted before publication. By preparing investor responses against the TCFD pillars and ISSB Standards now, this reduces the risk of non-compliance and helps safeguard your organisation against potential litigation.

Leverage market opportunities

As investors are increasingly demanding transparency such as comprehensive climate plans, directors are forced to reassess their strategies to ensure that they maintain relevance. Diolog helps you articulate a compelling board narrative, establish clear timeframes for your sustainability goals, and demonstrate your commitment to long-term value creation. By doing so, you can build investor confidence and establish your company’s reputation of supporting the international baseline of high quality reporting.

As ASIC considers that those entities already reporting under the Task Force on Climate-related Financial Disclosures (TCFD) are well placed to report under any future mandatory reporting regime, it is important that you also start doing the same. While the transition to mandatory ESG reporting will require a significant uplift in capability and processes, it also provides an opportunity to lead in sustainability and transparency. Diolog is here to support you throughout this transitional phase. If you want to find out more, book a demo!