Regulatory update
ASIC seeks feedback on guidance for the new sustainability reporting regime
ASIC has released draft guidance on the new sustainability reporting regime and is seeking feedback through CP 380. Here is what the draft covers and who must report.
7 November 2024
On 7 November 2024, the Australian Securities and Investments Commission (ASIC) released its draft guidance on the new sustainability reporting regime. It is asking for feedback from businesses and other stakeholders.
ASIC released two documents:
- draft Regulatory Guide 000 Sustainability reporting (Draft RG 000), and
- Consultation Paper 380 (CP 380), which asks for feedback on the draft guide.
Feedback on CP 380 is due by 19 December 2024.
Update (October 2026): ASIC finalised this guidance on 31 March 2025 as Regulatory Guide 280 Sustainability reporting (RG 280). According to ASIC’s media release, the final guide added sections on climate scenario analysis, scope 3 emissions and guidance for directors, and more guidance on the reporting thresholds. Mandatory climate reporting started for the first group of entities for financial years beginning on or after 1 January 2025.
Key takeaways
- The sustainability reporting regime is now part of the Corporations Act 2001 (Cth).
- It requires certain large entities to prepare an annual sustainability report with climate-related financial disclosures.
- It is being phased in over three groups, starting with financial years beginning on or after 1 January 2025.
- Draft RG 000 explains who must report, what reports must contain, and how ASIC will run the regime.
- ASIC also asked whether existing relief for financial reporting and audit should extend to sustainability reporting.
On this page
What is the sustainability reporting regime?
In September 2024, Parliament added sustainability reporting rules to the Corporations Act 2001 (Cth) (the Corporations Act). It did this through the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth).
The aim is to make climate-related financial disclosures better quality, more consistent and easier to compare across companies.
Who has to prepare a sustainability report?
In general, an entity must prepare a sustainability report and keep sustainability records if it:
- must prepare an annual financial report under Chapter 2M of the Corporations Act, and
- meets one of the sustainability reporting thresholds in section 292A.
The report must contain the climate-related financial information required by the Corporations Act and the Australian sustainability reporting standard AASB S2 Climate-related Disclosures.
When do the requirements start?
The rules are being phased in over three years:
| Group | Reporting starts for financial years beginning on or after |
|---|---|
| Group 1 | 1 January 2025 |
| Group 2 | 1 July 2026 |
| Group 3 | 1 July 2027 |
What is ASIC’s enforcement approach?
ASIC knows that businesses need time to build their reporting skills and systems. It has committed to a proportionate and pragmatic approach to supervision and enforcement while the regime is being introduced.
That does not mean there is no risk. Entities should still prepare early so they can meet their obligations.
What does the draft sustainability reporting guidance cover?
Draft RG 000 gives guidance on:
- who must prepare a sustainability report
- how the regime works with existing legal obligations
- how ASIC will run the regime, including when it may grant relief and how it will use its new directions power (a power to direct an entity to fix or change its report)
- what the sustainability report must contain, and
- sustainability-related financial information published outside the report.
ASIC Commissioner Kate O’Rourke said:
‘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.’
What happens next?
ASIC is asking for feedback through CP 380. It wants views on Draft RG 000 and on whether its existing relief for financial reporting or audit should also apply to sustainability reporting.
Submissions are due by 19 December 2024. ASIC expects to release the final regulatory guide in the first quarter of 2025.
Frequently asked questions
Has ASIC finalised its sustainability reporting guidance?
Yes. ASIC released the final guide, RG 280 Sustainability reporting, on 31 March 2025.
When did mandatory climate reporting start?
For Group 1 entities, it applies to financial years beginning on or after 1 January 2025. Groups 2 and 3 follow from 1 July 2026 and 1 July 2027.
Does every business have to report?
No. Only entities that must prepare an annual financial report under Chapter 2M and meet a threshold in section 292A are covered. Many small businesses will not need to report.
Will ASIC take enforcement action straight away?
ASIC has said it will take a proportionate and pragmatic approach during the phase-in. It has said enforcement is more likely for serious or reckless misconduct, or where a required report is not prepared.
Need help with sustainability reporting?
Talk to our banking and financial services team
Banking & Financial Services Law
Our team can help you understand whether the sustainability reporting regime applies to you and what you need to do. Learn more about our financial services regulation and licensing services.
This article is general information only and is not legal advice. It reflects the law and information available at the date of publication. Please contact us for advice about your circumstances.
Related updates
Table of Contents
Posted in Financial Services Regulation