Free ASRS Climate-Related Financial Disclosures Guide

Understanding and managing climate-related financial risks has become a non-negotiable for modern businesses — especially in the face of regulatory changes and growing investor scrutiny. To help companies navigate this complex terrain, Avarni has released a free guide titled "Climate-Related Financial Disclosure: Assessing Risks & Opportunities", tailored to support compliance with the ASRS and AASB S2 standards. This guide is an essential starting point for risk managers and sustainability professionals working to embed climate risk into financial and strategic planning.

A strategic tool for risk identification and disclosure

At its core, the guide offers a practical overview of the climate-related financial disclosure process, structured around the widely accepted framework of the Task Force on Climate-related Financial Disclosures (TCFD). It walks users through four critical steps: identifying climate risks and opportunities, assessing these through a materiality lens, managing the risks via internal controls, and integrating findings into business strategy and financial planning.

The guide is particularly useful in helping risk managers think across time horizons—short-term (less than 1 year), medium-term (1–5 years), and long-term (beyond 5 years)—and assess how physical and transition risks might affect different sites, regions, or assets. This approach aligns with AASB S2's emphasis on scenario-based and location-specific disclosure.

Designed for sustainability and finance professionals

This resource is aimed at sustainability consultants and financial reporting teams who need to understand and operationalise climate disclosures quickly and efficiently. It bridges the gap between high-level recommendations and actionable steps, making it a useful tool for both internal reporting and preparing public climate disclosures aligned with ASRS expectations.

For professionals used to the alphabet soup of ESG frameworks, the guide delivers clarity by integrating terminology and categorisation directly from TCFD. It covers categories such as transition risks (policy, legal, technology, market, and reputation) and physical risks (acute and chronic), and maps each to potential financial impacts—like increased insurance premiums, stranded assets, or market share loss.

Practical features and benefits

What sets this guide apart is its emphasis on practicality. Rather than staying at a conceptual level, it provides:

• Examples of real-world risks and opportunities reported by ASX100 companies across diverse industries such as manufacturing, mining, professional services, healthcare, biotech, and retail.
• Financial impact pathways to help quantify risk in operational terms—e.g., increased capital expenditure due to flooding risks or revenue opportunities from sustainable product lines.
• Scenario analysis guidance, encouraging companies to model different climate futures using tools from the TCFD’s Scenario Hub.
• Integration tips to embed climate considerations into enterprise risk management, governance structures, and financial disclosures.

This resource helps companies avoid a checkbox approach and instead build a disclosure process that is aligned with strategic goals and investor expectations.

Key content highlights

The guide simplifies a complex process by organizing it into four digestible stages:

1. Identify risks and opportunities: Map the internal and external climate factors that could affect the business, using a time-horizon lens. This includes both physical risks (like flooding and heatwaves) and transition risks (such as changing regulation or consumer preferences).
2. Assess materiality: Prioritise risks based on potential impact and likelihood. The guide recommends defining terminology early and using a consistent framework to avoid fragmented reporting.
3. Manage climate risks: Build processes to mitigate, transfer, accept, or control risk. This includes clarifying roles and responsibilities, and ensuring alignment with broader enterprise risk frameworks.
4. Integrate with strategy and financial planning: Connect the dots between risk analysis and business strategy. This involves scenario testing and disclosing how climate risks influence financial forecasts, operations, and long-term growth plans.

For example, a manufacturing company might assess transition risk from carbon pricing policies and respond by investing in energy efficiency upgrades and low-carbon product lines. Meanwhile, a healthcare provider might identify acute physical risks from extreme heat events that threaten supply chains and patient safety, prompting investments in infrastructure resilience.

Sector-specific insights

One of the most valuable components of the guide is the appendix of sector-based examples. These case studies distill climate risks and opportunities from ASX100 sustainability reports, offering practical illustrations of how different industries are preparing for climate impacts:

• Manufacturing: Focuses on operational efficiency, green product innovation, and supply chain localisation to address both physical and transition risks.
• Mining and Materials: Emphasises regulatory risk, water scarcity, and access to critical minerals for the energy transition.
• Professional Services: Highlights liability risks, climate advisory services, and ESG credentials as differentiators.
• Healthcare and Biotech: Includes resilient infrastructure design and telehealth expansion to reduce carbon-intensive travel.
• Retail: Covers sustainable product lines, packaging innovation, and circular business models to meet changing consumer expectations.

These examples offer valuable guidance for tailoring disclosures to reflect industry-specific vulnerabilities and strategies.

👉 Download: ASRS Climate-Related Financial Disclosures Guide