ASIC publishes regulatory guidance for sustainability reporting

On 31 March 2025, the Australian Securities and Investments Commission (ASIC) published regulatory guidance to assist entities preparing mandatory sustainability reports containing climate-related financial information under Chapter 2M of the Corporations Act 2001. Regulatory Guide 280 Sustainability reporting (RG 280) incorporates feedback from the consultation process in late 2024, and explains:

Who must prepare a sustainability report (Section B)
The content required in a sustainability report (Section C)
What happens when sustainability-related financial information is disclosed outside the mandatory sustainability report, such as in the Operating and Financial Review, disclosure documents or product disclosure statements (Section D)
How ASIC intends to administer the sustainability reporting requirements, including how it will consider relief and its new directions powers (Section E).

ASIC has also provided relief to allow stapled entities to prepare a consolidated sustainability report for the stapled group. This is contained in amendments to ASIC Corporations (Financial Reporting by Stapled Entities) Instrument 2023/673.

Section B (preparing the sustainability report)

Section B provides guidance about:

Which entities must report and when

RG 280 no longer uses terminology from Treasury’s initial consultations on climate reporting in 2023. For example, references to the ‘assets under management’ threshold of $5 billion for registered schemes, registrable superannuation entities (RSEs) and retail corporate collective investment vehicles (CCIVs) now refer to ‘the value of assets’ threshold, and ‘asset owners’ is replaced with the correct terminology used in s292A (i.e. registered schemes, RSEs and retail CCIVs).

RG 280 also clarifies that a foreign parent entity does not have the option to prepare a consolidated sustainability report under s292A(2) in lieu of the Australian subsidiaries having to prepare their own individual sustainability reports. Our article contains more information on this.

Lastly, RG 280 clarifies that the following entities do not have to prepare a sustainability report due to the absence of Chapter 2M financial reporting obligations to ASIC:

Foreign companies registered under Division 2 of Part 5B.2
Small proprietary companies with no Chapter 2M reporting obligations
Charities relieved of Chapter 2M financial reporting obligations because they are registered with the Australian Charities and Notforprofits Commission
Entities granted relief by ASIC from financial reporting obligations under Chapter 2M (such as for whollyowned subsidiaries).

How RSEs, registered schemes and retail CCIVs determine whether they meet the sustainability reporting thresholds

Who is responsible for preparing mandatory sustainability reports of RSEs, registered schemes and retail CCIVs

This lies with the responsible entity of a registered scheme, the RSE licensee for an RSE and the retail CCIV on behalf of each relevant subfund.

Which accounting standard to apply when determining whether one entity controls another

The control assessment is critical to calculating the consolidated asset and revenue numbers for the size tests in s292A(3) and the value of assets threshold in s292A(6).

How to determine revenue, assets and number of employees for the size threshold tests in s292A(3) and (6)

Our article provides further discussion on this.

Which entities have an obligation to keep sustainability records

How material climate risks intersect with directors’ duties, with additional guidance regarding directors’ duties in relation to the sustainability report

The temporary modified liability settings and when they apply to protected statements

Section C (the content of the sustainability report)

Section C contains the following guidance:

The climate statements referred to in s296A and s296B

This includes climate disclosures required by AASB S2 Climate-related Disclosures as well as the statement made by a Group 3 entity under s296B(1) where the entity has no material climate-related risks and opportunities.

Group 3 entities with no material climate-related financial risks or opportunities under section 296(B)(1)

These entities must:

Confirm that they have no material risks or opportunities for the financial year by considering ‘materiality’ in AASB S2
Maintain adequate sustainability records to substantiate this assessment, and
Establish robust processes to ensure they meet the sustainability reporting requirements for any subsequent financial year.

Disclosing forward-looking information

Entities must ‘use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort’, reflecting that the quality and availability of data to support forward-looking information is expected to evolve over time.
Entities should disclose the basis for forward-looking statements (the methods and assumptions used) and maintain adequate records to explain the methods, assumptions and evidence to support these statements.

Cross-referencing the sustainability report to other documents

The sustainability report should be lodged at the same time as the annual financial report, and entities are encouraged to lodge with ASIC at the same time as the sustainability report or any other report they have cross-referenced in the sustainability report.

Labelling of reports

RG 280 acknowledges that some entities may wish to disclose all their sustainability-related information together, i.e. both mandatory and non-mandatory information in the same report. In such cases, mandatory climate-related disclosures should be clearly identifiable and not obscured by additional voluntary disclosures.
In other cases where the sustainability report contains only climate-related financial information required under the Corporations Act 2001, the report should prominently describe that it contains only the mandatory disclosures required under s292A.
ASIC will administer the laws on the basis that entities may choose to include additional sustainability-related information in the one sustainability report, provided that the mandatory disclosures are clearly identified and not obscured. This could be achieved by using an index table in a prominent location in the sustainability report to identify information required by s292A and AASB S2, with appropriate cross-reference to paragraph numbers in the sustainability report (although it is not clear how mixing audited and unaudited sustainability information will be dealt with in the auditors’ report).

Climate-related scenario analysis to assess climate resilience

Confirms that entities must use an approach that is commensurate with the entity’s circumstances.
Entities must have a minimum of two climate scenarios (high and low, with the high scenario assuming a global average temperature increase well exceeding 2 degrees Celsius, which in practice would be at least 2.5 degrees Celsius above pre-industrial levels).

Scope 3 greenhouse gas (GHG) emissions

Entities can use estimations to measure Scope 3 GHG emissions (as permitted by AASB S2) as well as primary or secondary data, or a combination of both, noting that the reliance on secondary data may reduce over time as the availability and quality of data improves.

Proportionality mechanisms

Provides guidance about how these concepts within AASB S2 should be interpreted and supported by adequate records.

Section D (sustainability-related financial disclosures outside the sustainability report)

Section D focuses on using information extracted from the sustainability report in other documents, such as the Operating and Financial Review for listed entities, disclosure statements for fundraising, and product disclosure statements. It notes that entities should consider AASB S1 and AASB S2 as part of this process, including non-reporting entities that have no legal obligation to prepare a sustainability report.

Section E (ASIC’s role in administering sustainability reporting)

In this section, ASIC outlines its approach to providing relief from preparing sustainability reports and the related audit requirements. Relief may be granted on a class basis by issuing a legislative instrument, or for an individual entity under section 340.

ASIC will not necessarily grant sustainability reporting relief merely because an entity has been granted financial reporting relief. An entity will not have to prepare a sustainability report if an ASIC instrument provides relief to an entity from having to prepare an annual financial report. However, if an ASIC instrument provides some other form of financial reporting relief, such as relief to defer the entity’s financial reporting obligations, sustainability reporting requirements will continue to apply to the entity unless the entity seeks separate relief for this.

ASIC also outlines its approach to granting extensions of time for lodgement of the sustainability report, consolidated sustainability reporting relief, audit relief, and enforcement.

ASIC notes that its role is not to assess the ambition or merit of an entity’s climate-related strategy or targets which are strategic matters for the directors and management. This is on the proviso that the entity has complied with its disclosure obligations under the Corporations Act 2001 and any other laws that ASIC administers.

ASIC also notes that it will take a ‘proportional and pragmatic approach to supervision and enforcement’ as the reporting requirements are phased in.

More information

Our previous article answers your questions about mandatory sustainability reporting, and our website contains additional resources for sustainability reporting and measuring your carbon footprint.

Need help?

Our sustainability reporting, sustainability strategy, and carbon accounting experts are always available to assist with your sustainability reporting journey. Contact us for help.