Sustainability Reporting

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Mandatory sustainability reporting is coming

From 1 January 2025, certain entities submitting financial reports to ASIC under Chapter 2M of the Corporations Act 2001 will be required to make mandatory climate disclosures.

 What you need to know

  • Climate-related disclosures are the first, and currently the only, component of mandatory sustainability reporting.
  • Use the decision tree diagram below to determine if your entity is subject to mandatory sustainability reporting and which of the three groups it falls into.

Decision tree diagramClick to expand

Which entities must prepare mandatory sustainability reports?

Australian entities required to prepare and lodge a financial report with the Australian Securities and Investments Commission (ASIC) under Chapter 2M of the Corporations Act 2001 must prepare a sustainability report if they meet certain criteria. 

Our decision tree diagram will assist you in determining whether your entity is subject to mandatory sustainability reporting, and which of the three groups your entity falls into.

When to report?

The Corporations Act 2001 outlines the start dates, based on the group your entity falls into:

  • Group 1 entities: Reporting starts for financial years beginning on or after 1 January 2025
  • Group 2 entities: Reporting starts for financial years beginning on or after 1 July 2026
  • Group 3 entities: Reporting starts for financial years beginning on or after 1 July 2027.
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Sustainability standards

The Australian Accounting Standards Board (AASB) has approved its first sustainability reporting standards, bringing climate reporting closer for Australian entities.

The new standards

There are two new standards to be aware of:

  • AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information (voluntary)
  • AASB S2 Climate-related Disclosures (mandatory).

Assurance over your sustainability report

Is an audit required for your sustainability report?

Yes, an audit is required. Here’s what you need to know:

  • Section 301A of the Corporations Act 2001 (Act) mandates that sustainability reports must be audited according to auditing standards. This will follow the Australian version of the International Auditing and Assurance Standards Board (IAASB’s) ISSA 5000 General Requirements for Sustainability Assurance Engagements.
  • The Act also requires the Australian Auditing and Assurance Standards Board (AUASB) to set standards for auditing and reviewing sustainability reports for financial years beginning on or before 30 June 2030.

Phased implementation

While the whole sustainability report must be audited for financial years beginning on or after 1 July 2030, there will be a phase-in period before this date during which different sections of the report will be subject to varying levels of assurance.

  • Review engagement provides limited assurance
  • Audit engagement provides reasonable assurance on the sustainability disclosures.

Sustainability reporting resources

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Climate-related disclosures roadmap

BDO and Chartered Accountants Australia and New Zealand (CA ANZ) have teamed up to create a practical roadmap for Groups 1, 2 and 3 entities. This guide helps finance professionals navigate the evolving landscape of climate-related financial disclosures in Australia.

Download publication

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Taskforce on Climate-related Financial Disclosures (TCFD) checklist

Our TCFD checklist consolidates the 11 recommended disclosures and guidance for all sectors to help organisations perform a gap analysis as they embark on TCFD reporting. This resource covers key areas like governance, strategy, risk management and metrics, providing essential guidelines for effective climate-related financial disclosures.

Download publication

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Sustainability Activation Checklist

This practical guide can help organisations develop a sustainability roadmap in six steps, including assessing, prioritising, committing, measuring, reporting, and improving business sustainability.

Download publication

Sustainability reporting resources

Articles

Articles

Australian reporting
Climate reporting
Greenwashing
Sustainability reporting in practice
Sustainability standards and frameworks
History of sustainability reporting

BDO Global Sustainability Resources

BDO Global Sustainability Resources

► Sustainability at a Glance

► IFRS Bulletins

► International Sustainability Reporting Bulletins

Webinars

Webinars

Voluntary sustainability reporting

While mandatory sustainability reporting is on the horizon for some entities, many organisations are choosing to produce voluntary sustainability reports. This proactive approach reflects a commitment to transparency and continuous improvement.

Embarking on a voluntary sustainability reporting journey can be daunting, but breaking it down into manageable steps can make the process more achievable. For example:

  • Assess your current state of ESG activities
  • Understand stakeholders and business needs to prioritise the most important issues
  • Develop your sustainability strategy, ensuring it also aligns with the company strategy
  • Identify and measure a baseline for your agreed priorities
  • Prepare and publish your sustainability report
  • A journey of continuous improvement should follow the initial sustainability report, with a plan to monitor and develop performance improvements over time.

Overwhelmed by sustainability reporting? We’re here to help

We understand that navigating the new sustainability reporting legislation probably feels daunting. Determining which entities must report and by when may be a difficult and time-consuming exercise. Our expert sustainability reporting team is ready to guide you through the process and ensure your organisation meets all requirements.

Contact us

Contact our team to discuss your needs using the request for service form. 
Alternatively, call 1300 138 991 to speak with an adviser in your nearest BDO office.

Meet our team

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Aletta Boshoff

National Leader, IFRS & Corporate Reporting
National Leader, Sustainability
Partner, Advisory
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