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When the CFO, Tom Nisevic, sat down with his Big Four audit partner to review Metro Trains Sydney's first ASRS S2 report, the feedback was pretty good. Very good actually:
"It was the best, most well laid out and structured Sustainability Report they had reviewed across all their clients so far."
What stood out was that the structure made it significantly easier to cross-check the disclosures against the standard. That is a first-year result, from a business that started the year unsure what "good enough" even looked like.
But how did they get there?
MTS reported for the year ended 30 June 2026, its first year under AASB S2. Finance led the project, not sustainability. Seven things Tom would tell another finance leader starting now:
Tom's summary of working with a partner on Year 1: "Relief and trust. I went from 'how am I going to get this done' to 'we've got some great frameworks to actually add value.'"
What MTS had to produce
Under the ASRS, AASB S2 climate disclosures sit inside the annual report, are approved by the Board and are subject to external assurance. Year 1 is a transition year with limited assurance.
Metro Trains Sydney, operator of Sydney's driverless metro network, reported for the year ended 30 June 2026. As a June reporter it sat just behind the first December year end cohort: a narrow window to learn from others, and no room to start late.
How he got there
The report reviewed well because of a decision made before any of the work began. MTS ran ASRS as a financial reporting and assurance project with sustainability inputs, not a sustainability project. Finance led, the pillars of the standard set the work breakdown, existing processes were reused rather than rebuilt, and every judgement was documented on the assumption an auditor would ask for the evidence.
Trace worked with MTS on readiness assessment, climate scenario analysis, climate risk assessment methodology and risk exposure metrics.
One thing to consider: with the exec summary now sitting above this, "How he got there" repeats points 2, 3 and 4 almost exactly. You could cut that heading entirely and keep just the Trace scope line, which would get the reader to Tom's own words a lot faster.
We asked Tom how Year 1 actually ran, what surprised him, and what he would tell another finance leader starting now. His answers follow.
Tom Nisevic, Chief Financial Officer, Metro Trains Sydney
“We should have started earlier. We really started to drive it mid year, but in reality we should have started even earlier.”
Personally I find it important to get your head around what it all means. Making time to read the accounting standards, and chatting through with our audit partner what they had experienced early, was really valuable. It gave a good feel for the expectations of our audit team as well as things to consider as part of planning. Leverage them for examples of sustainability reports they are happy with and what learnings they have had to date.
I also reached out to my network and did some research on what others had experienced. Being a 30 June reporter, we were a bit fortunate to be a little later than the first December year end reporters, so it was good to get input from others early on.
That was step one. Getting your head around it and seeking input early. From there it was about breaking it down into manageable chunks and setting up a framework for our own situation. Using the pillars considered under the standard, governance, strategy, risk management and so on, made it simpler and more logical to tackle. Then mapping out key stakeholders across the business and setting up initial discussions to understand what we already had in place built an initial baseline understanding.
“We approached it as a financial reporting and assurance project with sustainability inputs. At the end of the day it forms part of our Annual Report, so Finance had to lead it.”
- Tom Nisevic, CFO, Metro Trains Sydney
We were very conscious of not treating it as purely a sustainability project. We approached it as a financial reporting and assurance project with sustainability inputs. At the end of the day it forms part of our Annual Report, so Finance had to lead it.
That said, Finance took responsibility for overall coordination and project management, but we set it up to drive a lot of the inputs from key stakeholders. Mapping the business against the pillars helped build awareness and connected stakeholders as co-owners. For MTS we have an Environment and Sustainability role, and we also needed to link in our risk team, internal audit team, parent entity and their sustainability team, the Company Secretary, even the CEO's EA.
One of the most important decisions we made was to leverage existing processes rather than build everything from scratch. MTS already had a relatively mature climate risk register, NGER reporting and enterprise risk management processes. The challenge was translating those existing activities into the ASRS framework and evidencing them appropriately.
That quickly showed where our gaps were, the volume of effort required and where our key pressure points were. That is when I looked to engage external support. What became evident really quickly was that we needed help linking what we had operationally with how it fitted the requirements of the standard. That is where Trace came in.
“What surprised me most was how much of the work wasn't actually about climate.”
- Tom Nisevic, CFO, Metro Trains Sydney
How much of the work was not actually about climate. The biggest effort was governance, documentation and audit evidence, and understanding what we already did versus expectations under the standard for Year 1 and future years.
A lot of confusion centred on how we assessed climate risks and what was relevant under the ASRS disclosure requirements. There were debates about how much of an impact those risks had on our business. We had, and still have, headaches in emissions data collection across our end to end supply chain and how to minimise disruption to the business. There were challenges in aligning on how to demonstrate evidence in support of climate processes, even at Board level. There is a lot of effort that goes into documenting climate risk assumptions, methodologies, controls and decision making.
What was easier? We already had a good baseline around climate risk assessment, because safety and climate impacts on our operations are key risks we needed to consider as part of our enterprise risk assessments. We had a reasonable starting point.
“Don't confuse rigour with complexity. A simple methodology that is consistently applied, documented and understood is infinitely more valuable than an overly complex model nobody really understands.”
- Tom Nisevic, CFO, Metro Trains Sydney
Our objective was to be rigorous enough to support audit assurance, but not to over engineer Year 1, and to make sure it was proportionate to our business operating model.
Working with Trace, we assessed climate risks under both a 1.5°C and 3°C scenario across multiple time horizons, and used our existing enterprise risk framework to evaluate impacts.
The key was focusing on risks that mattered to MTS operationally, and making sure that was consistent with what our business leaders believed. I don't feel the intention of the standard is to have a laundry list of risks to cover, but rather, what is the framework the business has for managing climate risks and opportunities, and what does that mean for the users of the annual report.
For example, physical risks such as extreme heat, storms and flooding have a much more direct impact on rail operations, asset performance and service delivery than many transition risks. It was valuable talking that through with our maintenance team, not just our risk team, to hear from the horse's mouth what a realistic scenario may be. For us that also fed into technical asset specifications and maintenance planning.
A difficult aspect was aligning on how to set boundaries on the impact from a climate event, as many people had different views. Getting different inputs was part of the process, but aligning it with our overarching enterprise risk framework, so climate risks and opportunities were proportionate to our broader non climate risks, was critical.
My advice would be not to confuse rigour with complexity. A simple methodology that is consistently applied, documented and understood by management, ARC, Board and your auditor is infinitely more valuable than an overly complex model nobody really understands. And make sure it aligns with whatever risk framework you already have.
“Engage your auditor early to understand what they will need before the audit even happens. Then you can be on the front foot rather than facing a mad rush at the end.”
- Tom Nisevic, CFO, Metro Trains Sydney
Apart from "I told you to start early"? One comment that has stuck in my mind is: "I will review what you disclose in your sustainability report, so make sure whatever you include you can back up with support and evidence." That was really important to understand, and it shaped how we went about the work and our evidence collation process.
Our audit team spent more time asking things like: how was this conclusion reached? What are the assumptions you are using to base your position on? What evidence supports it?
Year 1 is a transition year with limited assurance, so they are less focused on whether our climate forecast is perfectly accurate and more focused on whether the process is reasonable, appropriately governed and supported by evidence.
That is an important thing to understand about how you approach sustainability reporting. It is not just about getting the report done, but about how you build confidence in your audit team, Audit and Risk Committee and Board that management has approached it correctly. At the end of the day the Board is required to approve the Sustainability Report, so having the trust of external expertise built a lot of confidence internally that we had approached things appropriately.
One of the things I found confusing at the start were all the checklists. It was one of the things our audit team flagged a lot on, to ensure completeness of disclosures. I think I looked at way too many checklists and ended up more confused for it. Working with someone like Trace provided strong governance around readiness assessment, and mapping disclosures back to the standard, which answered a lot of auditor questions from the get go.
A key lesson is to engage your auditor early to understand what they will need before the audit even happens. If you have their list of expected support and queries to consider, you can be on the front foot rather than facing a mad rush at the end.
"It was the best, most well laid out and structured Sustainability Report they had reviewed across all their clients so far."
- Tom Nisevic, CFO, Metro Trains Sydney following a conversation with his audit partner.
I had a semi final review of the report and our process with our audit partner, and he was highly complimentary of the work Trace provided. He said it was the best laid out and most clearly structured sustainability report he had reviewed across his clients so far. In particular he said the structure made it significantly easier on their end to cross check against the standard.
I took them through the approach with Trace, including the portal and the climate risk assessment report. He was impressed with how it was set up and said it looked easy to use, especially compared with how some of his other clients had approached it with other specialist consultants in this space. He mentioned he was going to recommend Trace to some of his other clients, as it was a well balanced, structured approach.
We will finalise and lodge our accounts at the end of October, and while we have a few other bits to work through with the audit, we are actually in a better position on the Sustainability Report than I thought we would be when we started earlier in the year.
“Relief and trust. I went from "how am I going to get this done" to "we've got some great frameworks to actually add value."
- Tom Nisevic, CFO, Metro Trains Sydney
Trace helped in three very practical ways.
First, they helped us understand what we already had. Their readiness assessment validated that MTS already had a strong foundation in governance, climate risk management and emissions reporting, which avoided unnecessary work.
Second, they helped us focus on the areas that genuinely required uplift. For us that included climate scenario analysis, climate risk assessment methodology, and risk exposure metrics.
Third, and probably most importantly, they helped bridge the gap between sustainability concepts and audit requirements. They consistently challenged us to think about documentation, evidence, methodology and Board governance, rather than simply producing narrative disclosures. Their tool makes it much easier to bring together the various climate aspects MTS had in place, align them to ASRS and provide easy to understand actions we needed to focus on.
Their experience in such a new space also provided a huge level of comfort in our approach, which was invaluable in our dealings with the ARC, Board and our auditor.
“I'd probably be bald. I would have lost all of my hair. Without a partner like Trace, I can see that we would probably have overcomplicated our approach, requiring a lot more effort across all stakeholders and making it much less successful.”
I looked at external support consultants such as Trace and a few others, but also at bringing in a dedicated ASRS resource internally. The Trace tool and framework, and an external view of MTS' readiness, has been invaluable.
On our own, we would have got a report developed, but it would have meant a lot more challenge from the auditor, ARC and Board to have the same level of trust in the process. Another learning in hindsight is the value a partner brings in completing Year 1 to set you up for Year 2 and beyond. The Year 1 baseline is just much stronger.
If I had to sum it up in one line: relief and trust. I went from "how am I going to get this done" to "we've got some great frameworks to actually add value."
“ASRS is not really a sustainability reporting project. It is a governance, risk management and financial reporting project.”
- Tom Nisevic, CFO, Metro Trains Sydney
Year 1 was about compliance and establishing a foundation. Year 2 is about efficiency and operational integration, as well as closing Year 1 gaps. Rather than running sustainability reporting as a standalone project, we want to progressively embed it into normal business processes:
There is a lot involved, notwithstanding the compliance fatigue experienced across the business. A key part of this is reviewing our sustainability frameworks to minimise that fatigue by keeping what we do targeted and being clear on accountability and expectations.
What absolutely cannot happen again is treating this as a compliance box to tick. ASRS is not really a sustainability reporting project. It is a governance, risk management and financial reporting project. Engagement at all levels can initially be lacking, and it gets viewed as an exercise developed purely by the audit firms to create more revenue from extra audit fees. We absolutely need to evolve this into an operational lens rather than a compliance lens.
“Start with governance and materiality, not emissions.”
- Tom Nisevic, CFO, Metro Trains Sydney
Many organisations jump immediately to carbon calculations or disclosure templates. The biggest questions we dealt with were: what are our material climate risks? Who owns them? How are they governed? How does management report them to the Executive, ARC and Board? What evidence supports those processes? Once those foundations are in place, the rest becomes far more manageable.
My second piece of advice is not to try to solve everything in Year 1. Focus on producing a defensible, audit ready report that satisfies the requirements and establishes a repeatable process. Year 2 and Year 3 are where you continue to mature the capability.
And come back to the intention of the standard. Good ASRS reporting isn't about predicting the future perfectly. It is about demonstrating that your organisation understands its climate risks, has appropriate governance around them, and can explain that clearly to the users of the annual report.
The organisations that succeed in Year 1 are not necessarily the ones with the most sophisticated climate models. They are the ones that can clearly explain their approach, support it with evidence and demonstrate effective governance from management through to the ARC and Board.
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Trace works with businesses at every stage of their mandatory reporting journey, from first emissions measurement to audit-ready ASRS S2 disclosure. Talk to our team to see how we can help.
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