At a recent executive lunch Trace hosted in Sydney, audit came up as one of the sharpest pain points in the room. Senior finance leaders, CFOs and ESG directors from Group 1 and Group 2 companies described assurance fees as increasingly material, with some reporting that CFOs are actively pushing back on cost.
One line from the table landed with particular force: "Money is better spent on decarbonisation than audit."
It's a fair frustration. But it's also an incomplete picture. ASRS assurance costs are real, and in many cases they are higher than they should be. But the value audit brings to climate disclosure is real too, and it's worth being clear-eyed about both sides before drawing conclusions about what to do next.
The frustration we're hearing most often: organisations feel like they're funding the learning curve of their assurance providers. Climate reporting is new territory for auditors as well as preparers. In Year 1, that means more back-and-forth, more documentation requests, more time spent explaining methodology, and all of that shows up in the invoice.
The documentation burden is also larger than many organisations anticipated. Several leaders at our Sydney lunch described audit requests that went well beyond what they'd expected: internal workshop records, meeting agendas, participant lists, evidence trails for decision-making processes. The operational cost of producing and maintaining that evidence is material, and it sits on top of the assurance fee itself.
This creates real pressure on finance teams already stretched by Year 1 preparation. Every dollar spent satisfying audit requirements is a dollar not spent elsewhere, and for organisations still building the internal case for ASRS investment, that pressure matters.
It's worth being clear about what assurance actually does for climate disclosure, because it does quite a lot.
ASRS assurance formally places climate reporting in the CFO's remit. That might sound like a structural detail, but the practical effect is significant: it shifts climate disclosure from a sustainability project into a financial accountability exercise. Boards engage more deliberately. Finance, legal and governance teams get involved in ways they simply wouldn't without an audit requirement. The work gets taken seriously at the level where it needs to be.
Accuracy matters too, and assurance enforces it. Organisations cannot make up their numbers and hope no one looks closely. That accountability is important, not as a compliance formality, but as the foundation for credible, comparable data that can actually be acted on. If disclosed emissions figures can't be trusted, they can't inform meaningful decisions.
The audit requirement is also what gives ASRS disclosures their weight with investors, regulators and other stakeholders. Unassured climate disclosures would carry far less credibility. The friction of audit is part of what makes the framework meaningful.
If audit costs feel disproportionate, it's worth asking why, because in many cases the answer isn't that assurance is too demanding. It's that the underlying compliance process isn't audit-ready.
Manual data collection. Evidence that lives in email threads rather than systems. Emissions calculations documented in spreadsheets not designed for external scrutiny. Governance records reconstructed after the fact. These are the things that make audits expensive: auditors spend time on work that a better-prepared organisation wouldn't need to produce at all.
The path to lower audit costs isn't less assurance. It's more efficient compliance: cleaner data, better systems, and disclosure processes built with auditability in mind from the start. That's a different conversation to the one that often gets had.
The way Year 1 feels will shape how organisations approach everything that follows.
If the first year of ASRS is an exhausting and expensive slog, opaque and disconnected from how the business actually operates, it becomes very hard to build internal momentum for what comes next. Climate risk action plans. Emissions reduction work. The strategic decisions that ASRS is ultimately designed to inform. All of it starts to feel like more work piled on top of an already painful process.
That's the wrong outcome. Year 1 should be about laying foundations: building good data systems, securing board-level buy-in, producing a disclosure that's accurate and defensible, and demonstrating genuine value from the process. That means showing the board what the climate risk assessment actually revealed: the financial implications of identified risks, and what they mean for strategy going forward. Not framing the work as a compliance burden, but as a practical source of business insight.
Build that foundation well, and Year 2 becomes meaningfully easier. Systems are in place. Methodology is established. The organisation understands what's required. Audit costs come down as processes mature and auditors become familiar with your approach.
Get Year 1 badly wrong, and the damage isn't just this reporting cycle, it's the appetite for everything that follows.
The approach we advocate at Trace is minimum viable compliance: do what's required, do it well, and don't over-engineer it.
That means focusing on the disclosures that matter, building audit-ready processes from the start, and spending less time on data wrangling and administrative overhead, so there's more time and resource for the work that creates actual value. Less chasing evidence trails. Less manual data collection. More clarity on what the numbers actually mean for the business.
Not perfection in Year 1, but a defensible, efficient baseline that gets better over time, and that leaves room for the strategic work that ASRS is ultimately meant to enable.
If the cost of compliance is becoming a board conversation at your organisation, the answer isn't to question audit. It's to ask whether your compliance process is as efficient as it should be.
Book a call with the Trace team to understand what minimum viable ASRS compliance looks like for your organisation.
What does ASRS assurance require? ASRS requires limited assurance over climate-related financial disclosures for Group 1 entities from their first reporting year. This means an independent auditor reviews your disclosure and provides a conclusion that nothing has come to their attention indicating the information is materially misstated. It covers emissions data, climate risk disclosures, governance statements and financial estimates.
Why are ASRS audit costs so high in Year 1? Year 1 audit costs are elevated for two reasons: auditors are building their own capability in a new area, which takes time; and many organisations haven't yet built audit-ready processes, so auditors spend significant time gathering and validating evidence. Both factors reduce over time as systems and familiarity improve.
Can I reduce my ASRS audit costs over time? Yes. The most effective way to reduce audit costs is to improve the auditability of your compliance process: cleaner data systems, documented evidence trails, clear governance records, and disclosure processes built to be verifiable from the start. Organisations that invest in efficient compliance infrastructure in Year 1 typically see audit costs fall materially in Year 2 and beyond.
Is limited assurance enough for ASRS in Year 1? Yes. ASRS currently requires limited assurance for Group 1 entities in their first reporting years, with reasonable assurance expected to phase in over time. Limited assurance is a proportionate starting point that provides meaningful credibility to disclosures without the full burden of a reasonable assurance engagement.
What is minimum viable compliance for ASRS? Minimum viable compliance means producing an accurate, defensible ASRS disclosure that meets all mandatory requirements, without over-engineering the process or generating unnecessary volume. It focuses on what's required, builds audit-ready processes from the start, and prioritises efficiency so organisations can direct resource toward the strategic work the framework is designed to enable.
Trace is a climate reporting platform specialising in ISSB and AASB standards, helping businesses navigate mandatory climate disclosure with clarity and confidence.
London - Sydney
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