Mandatory Sustainability Reporting: A Board-Level Priority

Sustainability is no longer a corporate social responsibility (CSR) checkbox. From 1 January 2025, new mandatory sustainability reporting rules require Australian companies and financial institutions to publish annual reports that include climate-related financial disclosures.

This is a structural change in corporate reporting. Investors, lenders, customers and regulators will be able to compare climate exposure and plans in the same way they compare balance sheets and profit and loss.

What the new regime requires

Australia’s new sustainability reporting framework draws on the Australian Sustainability Reporting Standards (AASB S1 and AASB S2), and establishes detailed guidelines on what must be disclosed, covering governance, strategy, risk management, metrics and targets, with climate-related financial information at the core.

Reporting will be phased in by company size, starting with the largest and most emission-intensive companies. External assurance will also apply, with climate disclosures eventually audited to the same standard as financial statements.

Why this matters for materials handling companies

Materials handling companies, including equipment manufacturers, fleet operators, warehouse owners and logistics providers, are at the centre of emissions and supply chain exposure. Every forklift, service vehicle and warehouse energy system contributes to a business’s measurable carbon footprint, and the way they are powered, managed and maintained will need to be reported with the same rigour as financial data.

Customers want to know how their goods are stored, moved and delivered. Procurement teams want suppliers that can ensure low-emission fleets or facilities. And global companies are passing Scope 3 requirements down their supply chains. Even independent operators will be expected to provide audited data. MHE companies face three direct channels of impact:

1. Operational emissions (Scope 1 & 2): These include forklifts, internal combustion engine (ICE) fleets, and onsite energy use in warehouses and service workshops. These are squarely within your control and represent one of the clearest levers for rapid reduction. Common approaches include fleet electrification, improved energy-efficiency, and the use of on-site renewables.
2. Value chain emissions (Scope 3): These cover emissions embedded in manufacturing, transportation, leased equipment, customer use of products and end-of-life processes. The regulatory regime requires visibility of these flows. For many companies, Scope 3 will be significant and will need to be measured and disclosed.
3. Transition and physical risk: Risks include shifting customer demand for electric fleets, increasing regulatory pressure, carbon pricing, and physical climate impacts on warehouses and transport routes. These factors create financial risk, and investors will expect companies to quantify them and explain how they will be managed.

A roadmap for change for your business

1. Treat sustainability reporting as financial reporting: The CFO and audit committee should lead, supported by operations, supply chain and sales. This signals that sustainability is being taken seriously at the highest level.
2. Map and prioritise emissions: Start by measuring your direct emissions, e.g., fuel, vehicles and warehouse energy. These will identify the indirect emissions that matter most, including the energy your rental fleet consumes, and the steel and electronics that go into your forklifts.
3. Invest in data and digital controls: Reliable reporting depends on accessible, auditable data. Practical tools include fleet telematics, energy meters, procurement data and supplier questionnaires. Auditors will also test controls and data accuracy.
4. Align strategy and capital plans with reporting: Show how goals — including fleet electrification, service fleet conversion, circular spare parts and battery lifecycle plans — align with your targets and long-term growth. These actions reduce transition risk while opening opportunities with customers seeking low-emissions suppliers.
5. Engage suppliers and customers: Scope 3 is a supply chain exercise. Build supplier engagement programmes, embed sustainability in procurement and offer customers lower-carbon options such as electric fleets and managed-service agreements.
6. Prepare for assurance and regulatory scrutiny: External assurance will become standard. Plan ahead by strengthening documentation and controls. And expect regulators like ASIC and AUASB to include sustainability reporting as part of their audit focus.

The upside of compliance

Yes, compliance brings cost and complexity, but the upside is significant: better risk management, lower lifecycle costs through electrification and efficiency, stronger ties with customers transitioning their own fleets, and improved access to capital from ESG-focused investors.

For materials handling companies, this is an opportunity to demonstrate leadership. Companies that act now will not only be ready for mandatory reporting, but will also convert sustainability into a source of competitive advantage.

Towards a greener future

Mandatory sustainability reporting is not just about disclosure. It is a chance to reframe operational decisions through the lens of resilience and opportunity. For materials handling firms, it accelerates innovation, from electrifying fleets and digitising asset management to redesigning service models and building stronger supply chain partnerships.

The first reporting windows are already open. Stakeholders will expect transparent, audited, decision-useful information, just as they do for financial performance. The companies that prepare early will be the ones leading the industry into a greener future.

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