Reading the first reports: what Group 1 did, and what Group 2 should take from it

Australia's first mandatory climate reports are now on the public record, and for super funds they are a useful mirror held up a year early. Group 1 entities – the largest companies and heaviest emitters – reported first, for periods beginning on or after 1 January 2025. Super funds do not report yet. As asset owners they are always Group 2, and their first mandatory report covers the period ending 30 June 2027. That gap is an advantage worth using. Read together, the first reports say something clear about where a fund's own first report is likely to sit.

The defining feature of the first wave is variability. In one review of 22 first-wave reporters, disclosures ran from 7 to 82 pages, averaging 30, with about two-thirds putting a financial number on the impact of climate risks and opportunities and the rest leaning on the standard's measurement-uncertainty relief. Around 65 per cent set a specific climate target. This is not a settled template to copy. It is a maturity curve forming in real time, and the more useful question a fund can ask of it is not “what is the format” but “which rung do we want to be on”.

Underneath the variation, the shape is consistent. Every reporter disclosed a short, risk-weighted set of climate-related risks and opportunities, relevant in all cases reviewed. There were usually a handful: one physical risk split into acute and chronic; one or two transition risks across policy, technology and market; and one or two opportunities. Resilience was tested with scenario analysis across at least two pathways, one around 1.5 degrees and one well above two, and reporters converged on the same reference futures, most drawing on the NGFS pathways and the IPCC's, with a majority using a 1.5-degree IPCC pathway to meet the legislated requirement. The risk categories and the scenarios are, in effect, shared. The differentiation is elsewhere.

It shows up first in what gets quantified. Physical risk, which is inherently about the location of specific assets, was more often put in numbers than transition risk, which for a diversified investor depends on policy and technology paths across dozens of sectors and jurisdictions. Where reporters could not credibly quantify a transition effect, most said so and stayed qualitative. That is a legitimate choice, and ASIC has been explicit that it will accept measurement uncertainty only where it is genuinely high and clearly explained, the disclosure equivalent of showing your working. The reports that quantified more were, with few exceptions, the ones with more granular exposure data underneath.

The sharpest differentiator – and the one that matters most to an asset owner – is financed emissions: the portfolio's own Scope 3 Category 15. Across the reporters closest to an asset owner's problem – those whose disclosure is mostly about an investment book – the treatment ranged from nothing at all, through a single provider-sourced intensity proxy, to asset-class intensity with disclosed coverage, up to a full inventory carrying a PCAF data-quality score of 1 to 5 on each figure. That range is the maturity ladder a super fund's first report will be placed on. In year one the portfolio number itself is deferred, because Scope 3 is not required until the second year, but as the first article in this series argued, deferral is not the same as not needing to know it.

One archetype is worth watching closely: a sovereign investor moving from a voluntary, TCFD-informed report to its first mandatory one a full reporting cycle ahead of the super funds. It is the nearest thing to a dress rehearsal for a large, diversified asset owner, and it is candid about the hard part: still building a consolidated, whole-of-portfolio emissions picture while disclosing intensity for the parts it can already cover. That candour, coverage stated plainly and gaps named, is itself the emerging good practice.

Read across all of it and one conclusion holds: The distance between a thin first report and a strong one is almost entirely a distance in data. The reporters that landed higher had reconciled, attributable, quality-scored holdings data. The ones that fell back to proxies, or to “not decision-useful”, did so where that data was missing, and it was missing in the same place every time: private and unlisted holdings, and look-through into pooled vehicles. The gap is a data-granularity gap, not a modelling one.

For a super fund, the useful implication is that the year before the first report is not dead time. It is the year to build the base the narrative will later stand on. None of this is solved for anyone, and the disclosure itself – the judgement about what is material and how to say it – sits with the fund and the consultants and auditors who prepare it. What we work on, alongside many of Australia's largest super funds, is the layer beneath that: bringing listed and private holdings into one reconciled view tied back to the fund's own records, with a PCAF data-quality score and attribution on every figure, through Pathzero Navigator. A fund that has that in place can choose where on the ladder it stands. Without it, the available data makes the choice.