The Australian Securities and Investments Commission (ASIC) has released final guidance to help companies comply with new mandatory sustainability reporting requirements that took effect Jan. 1.
The new rules apply to large businesses and financial institutions that meet certain thresholds and require them to disclose climate-related financial risks, opportunities, and strategies each year. ASIC’s Regulatory Guide 280 Sustainability Reporting (RG 280) explains how entities should prepare these reports under Chapter 2M of the Corporations Act 2001.
The final guide follows months of consultation, with ASIC receiving 60 submissions from stakeholders including industry groups, law firms, and audit providers. In response to feedback, ASIC added guidance on climate scenario analysis, scope 3 emissions, and responsibilities of directors.
“Climate-related financial information that is consistent, comparable and of high quality facilitates confident and informed decision making by investors and other users of that information. The publication of RG 280 is a critical piece that supports the implementation of these sustainability reporting requirements passed by the Australian Parliament. We will continue to expand our broader suite of publications related to sustainability reporting over time as market practices evolve,” ASIC commissioner Kate O’Rourke said.
The guide also outlines how ASIC will oversee compliance, including a focus on education during the transition period. However, enforcement action may be taken in cases of serious misconduct or if required reports are not submitted.
Although the rules are aimed at large entities, ASIC reminded small businesses they could still be indirectly affected. Many operate within the supply chains of larger companies and may be asked to provide data like energy usage to help those businesses meet their reporting obligations.
Small businesses that are sole traders, partnerships, or trusts are not directly covered by the new rules. Companies will not be required to report unless, by 2028, they meet at least two of the following: $50 million in revenue, $25 million in assets, or 100 employees.
The new reporting framework will be phased in over three years. The first cohort of entities will begin reporting for financial years starting on or after Jan. 1, 2025, with the next two groups following from July 1, 2026 and July 1, 2027.
