The final session in our Compliance Countdown webinar series focused on the "Metrics and Targets" pillar of AASB S2 reporting. This session brought together everything we've covered so far and emphasised that metrics and targets are more than just emissions numbers, they’re about strategy, accountability, and readiness.
Key Takeaways
- Metrics and targets must go beyond emissions. You also need to disclose capital allocation, internal carbon pricing, and links to executive remuneration.
- A solid emissions inventory is essential. To prepare this section, involve your finance, legal, risk, operations, and leadership teams.
- Not everything needs to be assured in year one, but all relevant disclosures must still be made.
- Targets must be specific and detailed. Include your methodology, the scopes they cover, the part of the entity they apply to, time periods, milestones, and whether they are absolute or intensity-based.
- You are required to report cross-industry metrics. Sector-specific and voluntary metrics are encouraged where relevant.
- Documentation is critical. Include assumptions, emission factors, data sources, and methodologies. The process behind the numbers matters.
- Capital allocation must reflect climate goals. This includes investments in low-carbon technologies and divestments from high-emissions assets.
- Internal carbon pricing, like Microsoft’s $100/tonne fee, is a powerful tool to embed climate strategy into business decisions.
- Progress must be tracked year-on-year. Clearly define interim milestones to assess whether you’re on track and be prepared to explain any deviations.
Some Questions asked in the session:
- Q: Are companies expected to report beyond GHG emissions?
A: Yes. You must also disclose business exposure to risks/opportunities, capital deployment, internal carbon pricing, and remuneration links. - Q: How do you define vulnerability to climate risk?
A: It’s a combination of how exposed and how sensitive your assets or operations are to physical or transitional climate risks. - Q: How do you manage reporting for different audiences (e.g. auditors, board, public)?
A: Use a centralised system or hub. Your audit pack will be detailed, your board pack will be high-level, and your final report will summarise key disclosures. - Q: What if our organisation doesn’t have a carbon target or internal carbon price yet?
A: Just disclose that. It’s okay to state that you don’t have one, as long as you’re transparent. - Q: What should a sustainability manager do if they’re unsure about Scope 3 methodology?
A: Look at how leading companies do it, consult tools or partners that provide robust, auditable methods, and engage auditors early in the process.
Want to learn more about reporting on metrics and targets under AASB S2? Chat with our experts today!
Presentation Slides
