New climate-related transition planning guidelines released

A coalition of business and stakeholder groups including the Energy Efficiency Council, Carbon Market Institute, Chartered Accountants ANZ, Investor Group on Climate Change, Responsible Investment association Australia, Business Council for Sustainable Development Australia, PRI and Climateworks Centre released a statement welcoming the guidance.

“The Australian Government is one of few jurisdictions globally that has issued local guidance on climate-related transition planning. We commend the collaborative approach to developing this guidance, aimed at ensuring interoperability with global frameworks while tailoring it to the Australian context,” the organisations state.

“This guidance is a positive step forward that provides a practical starting point for corporate transition planning in Australia. Transition planning gives organisations an opportunity to prepare for, invest in and compete in a net zero economy – supporting Australia’s long-term economic resilience.”

• Read the full statement here.

Climate‑related transition planning is an internal process which incorporates identifying, assessing and planning responses to the risks and opportunities arising from climate change, including emissions reduction targets, new markets, financial costs of climate impacts, and emerging market shifts and regulatory changes.

The guidance, which is aligned with the Sustainable Finance Roadmap, will be valuable for entities completing mandatory climate disclosures under the AASB framework. AAASB reporting requires detail on identified climate risks and opportunities, along with their financial implications.

The guidance gives a strong rationale for undertaking transition planning including supporting long-term profitability, value creation and finance attraction.

Image: Commonwealth of Australia, Climate-Related Transition Planning (August 2026)

Risks are classed as either transition-related, or physical.

“Transition risks arise from efforts to transition to a lower-carbon economy including policy, legal, technological, market and reputational risks,” the guidance states.

“Physical risks result from climate change that can be event-driven (acute) or from longer-term shifts in climatic patterns (chronic).”

It also outlines some key climate-related opportunities.

These are framed as, “the potential positive effects arising from the transition to a lower-emissions and climate-resilient economy, including resource efficiency and cost savings, changes in markets and customer demand, access to new markets, and the development of new products, services or business models.”

“For example, a facility might identify potential for reduced energy costs and greater operational resilience through energy efficiency and demand-flexibility upgrades, together with installing onsite solar.”

Within the guidance, there are links to other relevant information, policy and resources including the National Climate Risk Assessment, the Australian Industry Transitions Initiative Pathways to industrial decarbonisation, Australia’s Net Zero Plan and sector emissions reduction plans, the Accounting for Sustainability Board Engagement Tool, the global Transition Planning Taskforce (TPT) Transition Planning Cycle and the AASB Knowledge Hub.

Why this matters for HVAC&R

HVAC&R sits at the nexus of the risks and opportunities of climate-related transition planning.  In developing adaptation strategies as part of a transition plan, for example, planning for investments in energy efficiency and improving air conditioning assist with managing exposure and vulnerability to physical risks such as extreme heat.

As businesses, HVAC&R practitioners and the supply chain are also increasingly subject to AASB reporting or disclosure requirements either directly, or to contribute to client or stakeholder reporting.

• Access the guidance here

Main image by Gerd Altmann from Pixabay

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