The world of sustainability reporting is often described as an ‘alphabet soup’, with new acronyms seeming to emerge all the time. If you’re relatively new to the sustainability reporting world, it can be a little overwhelming! So, we thought we’d put together a quick rundown of some of the most important acronyms for Australian businesses to understand as we head into 2025.
This is by no means an exhaustive list, but we hope it will act as a useful crib sheet – and we’ll do our best to update it over time. Deep breath! Here goes.
Environmental, Social & Governance.
You’ve probably already encountered this term – it’s often used interchangeably with ‘sustainability’. Essentially, ESG encompasses the three ‘categories’ typically used to organise and evaluate a company’s sustainability performance and create long-term value. Environmental includes things like energy, resources and emissions (the things people have most immediately associated with sustainability in the past). Social covers topics like workforce, health and safety, and modern slavery – this is an area that’s becoming more prominent. Governance is about how things are managed and who is accountable, bringing in concepts like transparency and stakeholder engagement. The term ESG doesn’t seem to be going anywhere so it’s a good one to get comfortable using.
Australian Sustainability Reporting Standards.
The ASRS are a new set of standards that guide how Australian entities are expected to publicly report on their sustainability-related risks and opportunities. I’m putting this one up top because it’s certainly a requirement that needs to be understood sooner rather than later for those affected!
The ASRS were finalised in early September after Australia’s climate-related financial disclosures legislation, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024, received Royal Assent.
Under this act, it will be compulsory for thousands of Australian companies and not-for-profit organisations to disclose information around how climate may impact their business financially, and what they’re doing about it. The ASRS comprise two standards – the first (AASB 1) covers all things sustainability, and is voluntary. The second (AASB 2) relates specifically to climate. The ASRS have been developed by the Australian Accounting Standards Board (a.k.a. the AASB – yep, another acronym!) and they position sustainability reporting as an essential inclusion within many entities’ annual reporting obligations.
International Sustainability Standards Board.
Established in 2021, the ISSB was created with the goal of developing an internationally applicable set of sustainability standards to drive high-quality, comprehensive disclosures geared to the needs of financial markets and investors. There was strong market demand thanks to growing awareness that sustainability – especially climate – can affect the financial performance of businesses and investments.
The ISSB is an independent body that sits within the IFRS Foundation, which already created a similarly globally recognised ‘language’ for accounting standards and financial reporting. They offer the FSA training credential, which I recommend as a solid introduction to sustainability accounting practices.
In 2023, the ISSB published two sets of sustainability reporting standards: IFRS 1, a voluntary standard covering general sustainability info, and IFRS 2, which relates to climate. These frameworks have been adopted by many countries, including Australia, and used as the basis for their own disclosure standards. Think of them as the ‘master’ template… and one that’s continually being reviewed and refined.
Sustainability Accounting Standards Board.
The SASB was set up in 2011 with the goal of developing sustainability standards to guide disclosures across 77 specific industries. The idea was to demonstrate to businesses how general sustainability concepts may ‘show up’ their specific sector and affect financial performance – helping them to more easily determine their material issues. In my mind, SASB really helped make sustainability concepts more relatable and put them in a context business owners could ‘get’. Never hurts to link these things to the bottom line, does it?
The good news: the SASB® Standards have been integrated into the development of the IFRS S1 and S2 Standards – and since August 2022, the IFRS has been responsible for maintaining and evolving the SASB® Standards, meaning they’re aligned with whatever else the ISSB is doing (and it’s one less governing body to keep track of).
Task Force on Financial-Related Climate Disclosures.
TCFD was set up in 2015 by the Financial Stability Board (FSB), an international body that works to, well, promote the stability of the global money markets through policy development. Having flagged climate as something that could affect global finances, they set about developing recommendations on the types of climate-related financial info that entities should be sharing publicly.
Basically, TCFD did a lot of the legwork that the ISSB would later build on – and its framework gave a lot of organisations a head start in understanding the type of disclosures they’d have to prepare. The TCFD was disbanded in 2023 and all its good work has been wrapped up in the IFRS S1 and S2 Standards. So, it’s likely to be an acronym that’ll fade into the distance. Thank you for your service, TCFD.
Sustainable Development Goals.
The SDGs represent a global call to action from the United Nations (UN) to protect the planet and ensure all its inhabitants enjoy a life of freedom, fairness and equality. Adopted in 2015 as part of the 2030 Agenda for Sustainable Development, the SDGs are intended to act as a kind of blueprint for peace and prosperity. There are 17 goals, covering areas such as climate action, affordable and clean energy, gender equality and zero hunger – however, it’s recognised that the SDGs are integrated, and that action in one area will impact outcomes in others.
The SDGs are applicable to all countries, and many organisations relate their own sustainability and ESG goals to the SDGs, signalling their support of, and contribution to, this bigger picture agenda.
Global Reporting Initiative.
The GRI is an independent not-for-profit organisation that’s been working to develop a global ‘common language’ for sustainability reporting for more than 25 years. The GRI standards are designed to be consistent, comparable and applicable across all sectors and geographies – giving organisations a way to transparently and credibly share sustainability progress in a way that can be easily benchmarked and verified.
A key difference between GRI and many other sustainability frameworks (such as ASRS and IFRS) is that it’s based on a ‘double materiality’ approach. So, reporting with GRI means considering not only the sustainability-related impacts that an organisation may be affected by (such as how climate change may interrupt operations), but also the sustainability-related impacts that the organisation may have on the world (such as its emissions, waste and work practices). It’s both outward and inward looking, so more holistic than some other frameworks that focus more on financial relevance.
The GRI organisation started out as part of the Coalition for Environmentally Responsible Economies (CERES), and it released its first set of standards in 2000. The GRI standards continue to evolve to ensure their ongoing relevance, and the organisation offers a wide range of helpful tools, content and training courses (including the GRI Certification program, which I recommend).
External Reporting Board.
It’s pretty much New Zealand’s version of the Australian Accounting Standards Board – and it’s in charge of NZ’s version of the ASRS (the Aotearoa New Zealand Climate Standards). As with many other things (did someone say ‘greening of the grid’?), NZ was a little ahead of Australia on climate reporting, and its mandatory disclosures have already been introduced.
xrb.govt.nz/standards/climate-related-disclosures/
The European Sustainability Reporting Standards.
The ESRS is to Europe what the ASRS is to Australia, and it was applicable from 2024 under the EU’s Corporate Sustainability Reporting Directive (CSRD). Unless you’re doing business over there, you probably don’t need to know a heap more about it.
unepfi.org/impact/interoperability/european-sustainability-reporting-standards-esrs/
Science Based Targets initiative.
The SBTi is a corporate climate action organisation that supports companies and financial institutions to take urgent action on climate. By setting ‘science based targets’, organisations publicly commit to reducing their greenhouse gas (GHG) emissions in alignment with the 2015 Paris Agreement. This means halving GHG emissions by 2030, and reaching net zero by 2050.
Currently, the SBTi’s Corporate Net-Zero Standard is the world’s only framework for corporate net-zero target setting in line with climate science. It includes the guidance, criteria and recommendations companies need to set science based net-zero targets consistent with limiting global temperature rise to 1.5°C.
In addition to setting standards, the SBTi offers a service to check and validate the science based targets submitted by corporates, financial institutions, and small and medium enterprises (SMEs) across the globe. Validation of an SBTi target is a BIG DEAL, and acts as a strong signal that an entity is taking climate action seriously.
The SBTi is incorporated as a UK charity. However, a number of organisations have facilitated its growth and development, including CDP, the United Nations Global Compact, the We Mean Business Coalition, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).
Originally, it stood for the Carbon Disclosure Project. Now it’s just CDP.
Back in 2000, CDP was established as ‘the Carbon Disclosure Project’: an initiative that called on companies to disclose their climate impact. Since then, it’s evolved to become known as simply CDP: partly because its scope now extends well beyond carbon. CDP is now an international not-for-profit that gathers data from thousands of companies, cities, states and regions about topics including carbon, water and climate change.
After evaluating the data provided each year, CDP uses independent methodology to ‘score’ companies and cities annually on their progress. The idea behind these scores is to incentivise companies and cities towards environmental leadership. CDP is one of the contributors to the SBTi – however, it remains an entity (and system) in its own right, too.
Greenhouse Gas Protocol.
The GHG Protocol has established a global, standardised framework for measuring and managing greenhouse gas (GHG) emissions. Its GHG accounting standards are used by thousands of companies and organisations worldwide, and also by countries and cities. Most Australian entities will be required to use the GHG Protocol as part of their ASRS reporting (the only exceptions are those required to report under the NGERS framework).
National Greenhouse and Energy Reporting Scheme.
NGERS is a national Australian framework under which companies report information about GHG emissions, and energy consumption and production. Companies that meet certain thresholds are required to report under the scheme, either for certain facilities or for their entire corporate operations. These are generally the country’s biggest emitters.
NGERS was established under the National Greenhouse and Energy Reporting Act 2007, and it’s administered by the Clean Energy Regulator (CER). Currently, around 900+ entities in Australia report their Scope 1 and Scope 2 emissions under the scheme. If you need to know about NGERS, chances are, you already do.
cer.gov.au/schemes/national-greenhouse-and-energy-reporting-scheme
Dow Jones Sustainability Index.
Launched in 1999, the DJSI is a family of indices that evaluate the sustainability performance of thousands of companies worldwide. Investors look to the DJSI as a trusted benchmark for how well companies are managing ESG issues such as climate change, supply chain standards and labour practices.
There’s one global index, DJSI World, plus a number of others based on geographical regions. The Dow Jones Sustainability™ Australia Index represents the top 30% of companies in the S&P/ASX 200 based on long-term economic, environmental and social criteria.
Dow Jones Sustainability Australia Index
Taskforce on Nature-related Financial Disclosures
A bit like the TCFD, but for nature-related impacts. TNFD is structured in the same way as TCFD, but rather than climate, it focuses on the ecosystems across nature’s four realms (land, ocean, freshwater and atmosphere), and the valuable ‘services’ they provide to society and the economy (such as drinking water or pollination of crops).
The initiative was announced back in July 2020, and has since developed, tested and launched the TNFD Framework. As of October 2024, more than 500 companies worldwide have voluntarily adopted the TNFD standards, including ten companies in Australia. Thankfully, the TNFD aligns with the work of both ISSB and GRI.
Transition Plan Taskforce.
At COP26, the UK government announced its plan to launch the Transition Plan Taskforce, which would set about developing a ‘gold standard’ disclosure framework for climate transition plans. True to its word, the TPT has already launched its framework, along with implementation guidance, designed to assist public sector companies to develop, articulate and implement their climate transition plans.
The TPT framework has been developed with inputs from 100+ organisations across finance, business, civil society, government and academia. It’s based on three key pillars: Ambition, Action and Accountability, and complements the ISSB Standards. Within the UK, the TPT framework is expected to influence regulation; globally, it’s setting a high standard that other countries (including Australia) can look to as reference.
Whew! Thanks for sticking with us. If there’s an acronym you’d like to see added to this list, or if you have any feedback on this article, we’d love to hear it – just drop us a line.
