Australian Sustainability Reporting Standards (ASRS) are coming soon
With travel and transport in Australia making up the third largest source of greenhouse gas (GHG) emissions, your fleet is likely to make a significant contribution to your overall environmental impact. And with the new Australian Sustainability Reporting Standards (ASRS) due to take effect from January 2025, now is the time to understand your reporting requirements.
The ASRS divides entities into three different groups, depending on their size, assets and revenue. Group 1 organisations are required to start reporting on or after 1 January 2025, Group 2 start from 1 July 2026 and Group 3 from 1 July 2027. It is important to note that if you’re a supplier to a Group 1 organisation, you may need to provide data to your clients or suppliers as part of their ongoing reporting obligations.
Regardless of the Group your organisation falls under, reporting on your fleet’s environmental impact can be complex for many organisations, especially if you haven’t reported on your fleet emissions in the past and you’re unsure where to start. It’s important for financial and sustainability business leaders to take time to understand the new requirements, and review systems and processes early so that planning is underway for any necessary changes.
Here are four things to consider as organisations plan for reporting on fleet and grey fleet emissions.
1. What data will you need to collect?
With fleet and grey fleet reporting, some criteria to consider are the classification of your vehicles, clearly demarcating purpose of travel (for example, business versus private) and odometer readings. Because every organisation and fleet are different, there is no one-size-fits-all, so we recommend getting expert advice on any matters relating to climate-related financial reporting.
“We recommend businesses work with their internal teams or external carbon accountants to determine the appropriate data that will allow for accurate reporting of their fleet emissions,” suggests Tracey Capper, Head of Sustainability at McMillan Shakespeare Group.
For example, here at the MMS Group, we report on a range of GHG emissions across scopes 1, 2 and 3. When it comes to fleet emissions, we collect:
- Fuel type, e.g. petrol or diesel for internal combustion engine (ICE) fleet cars
- Unit measurement like litres, kilometres travelled or cost
- Vehicle size or CO2 output per 100kms
- Watt/hour amount for electric vehicles
- Cost if charged to a public charge outlet
- Charge point locations.
2. How will you accurately collect the data you need?
Whatever data you determine you need to collect, it needs to be accurate, and any claims being made about emissions reductions, net zero and carbon neutral need to be backed by evidence to avoid any implications of greenwashing. Businesses that are required to report as part of the incoming climate-related reporting requirements will be subject to an assurance pathway through to 2030. This means data collection processes need to be robust, with accurate data and sound data management processes. If your employees are providing their data on their vehicle usage, the accuracy of your reporting will depend on them.
As businesses transition their fleet to electric vehicles, they will need to consider how they will capture the charging usage by those vehicles for business use. At MMS we have installed charging hardware technology in the homes of our employees who have fleet EVs, which aggregates all charging data automatically into a single platform.
Your Fleet Management Organisation (FMO) may also be able to help with tools to help make the data collection process easier.
“It’s important that businesses set up robust data collection and management processes first and work with employees, so they understand what is required of them when using their own vehicle or one supplied by the company.,” suggests Tracey. “Greenhouse gas emissions reporting is complex, businesses need to either have the capability internally to translate data like kilometres/litres into CO2 emissions or engage with external experts like a carbon accountant.”
Carbon accounting is the process of measuring an organisation’s GHG emissions - in carbon dioxide equivalent. Organisations that prefer to manage it internally will need to have a good understanding of carbon accounting methodology.
3. Be clear on which vehicles are classified as grey fleet
Many organisations rely on grey fleet – where employees use their private vehicle and receive a business vehicle allowance. This data is not often captured with the rest of their fleet data, and grey fleet emissions typically fall under Scope 3, unless the vehicles are owned or controlled by the reporting entity.
When it comes to reporting on grey fleet, gathering data for reporting can be a challenge faced by some organisations. For others, it can be the fact that they have limited influence over the types of vehicles their staff purchase and drive – for example, if a staff member chose a larger vehicle with a higher emissions output, this would act conversely to the business objective of lowering emissions.
“If you’re trying to reduce your carbon footprint and you’ve given your employees a $15,000 or $20,000 car allowance, they could go out and buy big heavy vehicles and you might not know about it. You can put policies in place around the standards and type of vehicles your employees have, but you need to think about how you’ll police that,” says Adam Morrison, CEO, Interleasing.
4. Measure your progress and optimise
By measuring your environmental impact, you can start to take steps to reduce your emissions and impact on the environment. If you’ve made environmental targets public, you can’t meet these targets without first understanding your emissions footprint. It is important to clearly communicate with your staff, so they understand why they need to provide the data you're asking for. Engaging with them early in the process about the importance of the data and how it aligns with emissions targets or emission reduction plans will bring them along the journey.
“A business’ fleet is considered part of their direct scope 1 emissions. At McMillan Shakespeare – Interleasing’s parent company – we’ve been reporting on our scope 1 emissions since FY21. In FY24 we reported that we’ve reduced our scope 1 emissions by 56% against our baseline year of FY19, which has contributed to a 63% reduction of our scope 1, 2 and 3 emissions since FY19,” says Tracey.
Here are a few strategies that may make an impact:
- Selecting lower emissions vehicles as part of your fleet composition
- Electrifying your fleet
- Tracking fuel usage
- Offsetting carbon emissions through a reputable carbon offset provider
- MMS offset our scope 1 and 2 emissions through Greenfleet
- Consider green finance to finance your fleet (but be aware that this won’t technically reduce emissions)
Tools like our digital logbook can help. For drivers, it puts the ability to log their vehicle size, fuel type and trip data including ATO-recommended trip purpose types, in their hands. For organisations, it helps with climate-related reporting, risk management and employee empowerment.
Climate-related reporting becomes mandatory from January 2025. Putting clear processes and tools in place to measure - and decrease - your fleet’s environmental impact can help you navigate the future with confidence. A FMO like Interleasing can help you manage your fleet and make sure you’re getting the most from it, so you can stay on track to meet your climate goals.
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