The Australian Securities and Investments Commission (ASIC) has released a draft regulatory guide aimed at supporting large companies and financial institutions as they prepare to meet new sustainability reporting requirements.
Under these proposed regulations, effective Jan. 1, 2025, qualifying businesses will need to issue annual sustainability reports that include disclosures on climate-related financial risks.
The draft guide, titled “Regulatory Guide 000: Sustainability Reporting (Draft RG 000),” outlines requirements for determining which entities must produce sustainability reports, details on compliance and disclosure obligations, and ASIC’s plans for implementing and overseeing the framework.
The guide also explains circumstances under which ASIC might offer regulatory relief and introduces a new directive authority to ensure compliance.
Draft RG 000 provides specific instructions on what companies must include in their sustainability reports and also covers other sustainability-related financial disclosures made outside these reports.
ASIC Commissioner Kate O’Rourke said the regulator’s primary goal is to support companies in meeting their disclosure obligations, which would result in climate-related information that is useful for investors and stakeholders.
“Our focus for this regulatory guide is to assist preparers of sustainability reports to comply with their obligations so that users are provided with high-quality, decision-useful, climate-related financial disclosures that comply with the law and the sustainability standards,” she said.
ASIC is seeking industry feedback on the draft guidelines through “Consultation Paper 380: Sustainability Reporting” (CP 380), which calls for input on several aspects of the proposed framework.
Stakeholders are invited to provide comments on whether certain existing ASIC regulatory reliefs for financial reporting should also apply to sustainability disclosures.
ASIC is also open to feedback on additional ways it can support the industry as these new requirements are introduced.
O’Rourke said ASIC wants the industry to engage with the draft guidance and the proposed rules.
“We want industry to engage with our draft guidance and what we are proposing. Their feedback will help us to ensure that we can effectively support the implementation of the sustainability reporting regime,” she said.
She noted that the transition to full compliance would require time as companies develop necessary reporting processes, with ASIC planning a phased approach to liability and a balanced approach to enforcement during the transition period.
ASIC is accepting feedback on CP 380 until Dec. 19, and encourages all companies that will be subject to the requirements to begin preparation.
This new reporting regime is part of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024, which introduced mandatory climate reporting for large Australian companies and financial institutions by amending the “Corporations Act 2001” and the “Australian Securities and Investments Commission Act 2001.”
The reporting framework will be implemented in stages. The first set of companies must report for fiscal years starting on or after Jan. 1, 2025. A second group will follow for fiscal years beginning on or after July 1, 2026, and a third for years starting on or after July 1, 2027.
ASIC has published further information on sustainability reporting requirements on its website.
