By Lisa Zembrodt, Principal and Senior Director, Schneider Electric

Many Australian businesses are entering the next phase of climate reporting in survival mode.

Inflation remains above target, energy and transport costs are still putting pressure on operating budgets, and economic growth has been modest.

Annual inflation was 4 per cent in May 2026 and GDP grew by 0.3 per cent in the March quarter. For business leaders, those numbers are not abstract. They show up in energy bills, supply contracts, insurance costs, capital decisions and customer demand.

Against that backdrop, it is understandable that some organisations look at the new, mandatory Australian Sustainability Reporting Standards and see another cost.

Climate reporting will reveal how well an organisation understands its own operations. Reliable disclosure depends on accurate data, connected systems and coordination across finance, procurement, sustainability and operations. Those same capabilities help businesses manage risk, identify waste and make better investment decisions.

That is where many businesses will struggle.

The problem is not that organisations lack ambition. Schneider Electric’s recent Energy Tech Pulse survey found half of Australian business leaders support mandatory climate-related disclosure, and three-quarters say their organisation is at least somewhat prepared. But only one in eight describe themselves as fully ready.

Many organisations still rely on spreadsheets, fragmented systems and manual processes to manage climate and energy data. These tools may help produce a report, but they do not provide the visibility needed to improve performance. A spreadsheet can tell you what happened last quarter. It is much harder for it to show where energy is being wasted, which assets are underperforming, or how future climate and energy risks could affect operations.

ASRS will force organisations to ask practical questions. Where is energy being used? Which facilities, processes or suppliers create the greatest exposure? Which parts of the business are vulnerable to heat, extreme weather, grid constraints or rising energy prices? Where could efficiency improvements reduce both emissions and cost?

For many leaders, the first valuable outcome may be the moment of realisation. They may begin the process thinking about compliance and end it with a clearer understanding of what is at stake for the business.

That shift is important because sustainability is often misunderstood. In its true sense, sustainability is about whether an organisation can sustain itself into the future. It is about financial durability, operational resilience and the ability to keep delivering outcomes in a changing economy. Energy is central to that equation.

Our research shows energy costs are one of the leading external challenges for Australian organisations. Four in ten businesses say energy costs or supply issues have caused them to delay or miss growth opportunities. Nearly half expect continued energy pressures to reduce profitability or increase operating costs.

Those figures should change how businesses think about climate reporting.

If energy costs are affecting margins, delaying projects and constraining growth, then better energy data is not a reporting luxury, it’s a business need. The same data required to support credible disclosure can also help organisations identify inefficiencies, improve procurement, optimise assets and reduce consumption.

This is where energy technology becomes critical.

Energy technology brings together electrification, automation and digitalisation. In practical terms, it gives businesses better visibility across energy use, assets, systems and performance. It helps turn operational data into decisions that can reduce waste, improve resilience and support more disciplined investment.

For sustainability teams, this matters because they cannot deliver ASRS alone. Climate reporting depends on data from finance, procurement, operations, facilities, energy managers, risk teams and suppliers. If those teams are working from disconnected systems, reporting becomes slow, manual and exposed to error.

A stronger digital foundation helps create a single view of performance. It allows organisations to move from retrospective reporting to active management. That is the difference between knowing energy costs have risen and understanding where, why and what can be done about it.

The skills challenge cannot be ignored. Almost three in ten Australian organisations say a shortfall in staff capability is their biggest obstacle to climate disclosure progress. At the same time, 30 per cent say they lack the internal skills required to meet new climate disclosure and compliance requirements.

That does not mean every business needs to build a large in-house sustainability team. It does mean businesses need clear governance, reliable systems and access to the right technical expertise.

The medium-term opportunity is significant. Businesses that properly engage with ASRS can gain a clearer view of how climate, energy and operational risks and opportunities affect their future. Those that use the process to improve data quality and invest in the right energy technology can reduce energy consumption, lower costs and strengthen resilience.

In the short term, many organisations will understandably focus on meeting the next deadline. In the medium term, the leaders will be those that treat climate reporting as a tool to understand their operations more deeply.

They will know where energy is being used. They will know where risk is concentrated. They will know where investment can deliver both sustainability and financial value.

The reporting process will also expose the gap between businesses that can produce a compliant document and those equipped to respond to changing energy costs, climate risks and operating conditions. Organisations with stronger data and decision-making systems will be better placed to adapt and remain viable over the long term.

INDEPENDENT NEWS IS IMPORTANT.

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