The AASB Sustainability Standards: A Guide for Private Market Actors
The global landscape of sustainability reporting is shifting, presenting both challenges and opportunities for private market actors. In Australia, The Australian Accounting Standards Board (AASB) has rolled out new Sustainability Reporting Standards, with entities that meet certain thresholds now required to report for annual periods beginning from January 2025. This shift marks a pivotal moment that necessitates a new strategic outlook. For private markets, ascertaining, analysing, and reporting on these new datapoints represents a key challenge, but, critically, also opens avenues towards newfound value creation.
The AASB Standards are designed to bring clarity, consistency, and comparability to ESG disclosures across industries. Closely aligning with the International Sustainability Standards Board (ISSB) framework, these standards aim to enhance decision-making by providing investors with high-quality and comparable sustainability data.
The key focus areas of the AASB Sustainability Standards include:
Climate-related risks and opportunities: Encouraging firms to disclose how climate factors impact their financial position and business strategy.
Scope 1, 2, and 3 emissions reporting: Increasing transparency on direct and indirect carbon footprints.
Material ESG factors: Requiring companies to report on ESG issues that are material to their stakeholders.
Alignment with international reporting frameworks: Ensuring consistency with ISSB, TCFD (Task Force on Climate-related Financial Disclosures), and other global standards.
The Impact on Private Markets
Whilst public companies have long been subject to increased ESG scrutiny, private markets are now facing similar expectations. Private equity firms, venture capital investors, and asset managers must adapt their reporting practices to align with evolving standards, particularly as institutional investors demand greater ESG transparency.
The challenges private market participants face include the navigation of complex and data-rich environments, with a multiplicity of non-standardised ESG reporting structures that can often feel overwhelming. There is also increased expectation from stakeholders that ESG concerns are baked into the decision-making process, and an evolving regulatory environment that requires diligence and preparedness.
With the AASB Standards taking a staggered implementation phase, businesses that take a proactive approach may reap increased benefits from being first movers, whilst firms that decide to wait may face increased implementation costs.
Dasseti ESG has been purpose built to meet these challenges across private markets. Our platform enables automated, AI enhanced data collection that streamlines reporting processes, analytics and insights, and high-grade reporting, freeing up time so that you can focus on making meaningful impact across your portfolio.
Want to stay ahead of the ESG curve? Get in touch with our team to explore how we can support your sustainability reporting journey.
