Climate Transition Plans: Decarbonisation is only one part of the puzzle

Under the new Australian Sustainability Reporting Standards (ASRS) companies in Australia are being asked to disclose transition plans, for some as soon as next January. To get up to speed on the new requirements, read our recent article and/or view our full webinar recording - ASRS Where to start for Mandatory Climate Disclosures in 2025.

Many companies are approaching this as a compliance piece, with a focus on decarbonisation, and ticking the box against the requirements. Whilst this is understandable, and there is a lot to do to get ready for reporting, are companies missing a trick by not developing a more complete plan?

Decarbonisation is a part of this puzzle, but it is more than that. A genuine transition plan is a long-term business strategy. It is a plan to survive and thrive in a world that is changing at an ever-increasing rate.

When navigating a transition plan, companies will want to consider:

• How will demand for current products and services change in a transitioning world?
• What products will need to be phased out, and how fast?
• What new or emerging technology will be important for your industry, and how will they change the way you interact with customers?
• What will your customers demand from your own sustainability, and how will these initiatives shift from being a differentiator to a must-have?
• What skills will you need to develop in your workforce to service these new markets? Are those skills available already, or is there a skills gap?
• What dependencies do you have - on suppliers, infrastructure, technology or supportive government policy – outside of your direct control, but needed to enable your transition?
• What internal resources – people, governance, capital, opex – will be required, now and over time, to realise the emerging opportunities

Based on the ASRS requirements, companies may not need to do all of this from a compliance perspective, but a minimal approach could leave companies exposed.

It is not about ‘going green’ or ‘doing the right thing’, it is about the long-term profitability of a business and should be top of every CEO’s list.

How SLR can help

SLR has a dedicated climate and energy transition team of over 600 professionals globally, providing leading climate science and data-driven solutions. Our climate insights allow our team to support clients to assess and quantify the financial impact from both physical and transition climate impacts. SLR is at the forefront of enhancing climate resilience and unravelling its complexities to help businesses successfully integrate solutions across the value chain to meet net zero commitments and achieve energy security and help ensure a Just Transition.

Contact us to discuss further.