Your Climate Report Will Be Audited. Scope 3 Arrives in Year Two

Under Chapter 2M of the Corporations Act 2001, entities that meet a sustainability reporting threshold must prepare a sustainability report containing the climate-related financial information required by AASB S2, Climate-related disclosures. The regulator sets out plainly that this report is lodged alongside the annual financial report, the directors' report, the auditor's report on the financial report and an auditor's report on the sustainability report itself.

That last item changes the nature of the work. A statement that will be audited has to be supported by records that existed before someone asked for them.

Scope 3 disclosures are not required in the first reporting year. They arrive from the second. It is tempting to read that as a year of relief; it is more useful to read it as the only window in which the data collection can be built without the deadline already past.

Scope 3 is the category that depends on other people's records: suppliers, carriers, processors and waste contractors. Those records are not produced on request. They are produced at the moment the material moves, or they are not produced at all.

Most organisations can reconstruct what they bought. Far fewer can say, with a record attached, what left the site, in what quantity, to whom, and what happened to it next.

That gap matters more than its size in tonnes, because it is the part of the footprint where the chain passes through third parties and where a reconciliation is most likely to fail. A number that cannot be traced back to a movement is an estimate wearing the clothes of a measurement.

Record each material movement with its weight, its counterparty and its timestamp, and keep the identifier stable when custody changes.

Decide and write down the chain of custody model behind any recycled or recovered content claim. The models are set out in ISO 22095 and they produce different numbers from the same material.

Document the exclusions. A boundary stated in advance is a methodology; the same boundary discovered by an auditor is a finding.

REZET Global is the operating group. It has run corporate upcycling programmes for around ten years and has been profitable since 2017, working with clients including Unilever, Toyota, Mercedes-Benz and Kuehne+Nagel.

REZET Hub is the platform built on top of that work and is revenue-backed. It exists to hold the record of each batch so that a figure can be traced back to the movement it came from. It is at MVP stage with a live demonstration on sample data, and we prefer to say so.