ASIC as sustainability
Mandatory sustainability reporting in Australia marks a significant shift in reporting and auditing practices. ASIC is actively helping professionals stay informed about regulatory developments under the Corporations Act 2001 (the Act) and AASB S2 Climate-related Disclosures (AASB S2), and other climate-related reporting matters.
As mandatory sustainability reporting is being phased in and entities adjust to the new reporting requirements, ASIC has re-emphasised that it is taking a pragmatic and proportionate approach to its supervision and enforcement of these requirements.
ASIC early observations on first reporters
ASIC has reviewed the sustainability reports of a subset of Group 1 entities with financial years ended 31 December 2025 and shared its early observations ahead of 30 June 2026.
ASIC’s review assessed whether disclosures provide high-quality, decision-useful information compliant with the Corporations Act 2001 and AASB S2.
It found improvements in both the volume and quality of climate-related information versus prior voluntary disclosures. ASIC also commented that standardised requirements were, in its view, driving more consistency and comparability. It highlighted effective use of tables, diagrams and visual aids.
We set out ASIC’s concerns and reminders.
Entities must not use disclaimers that conflict with statutory obligations as they may mislead or confuse users. At 31 December 2025, several entities included disclaimers in their sustainability reports that indicated users should not rely on the information contained in the sustainability report to make investment decisions, or that stated the entity took no responsibility for the accuracy or completeness of certain information.
Reasonable and supportable information for identifying climate-related risks includes past events, current conditions, and forecast future conditions. Examples were noted where entities previously disclosed impacts due to extreme weather events, but there were no disclosures in the current year sustainability reports on similar risks impacting prospects over the required time horizons.
Reports should clearly and effectively explain key judgements, estimates, assumptions and areas of measurement uncertainty. Some instances were noted where users would need to draw their own conclusions about why information was included or disclosed in a certain way.
Additional voluntary climate-related disclosures were not always distinguished from mandatory material climate-related financial information. ASIC reminded entities that index tables can be a useful tool for making this distinction.
When cross-referencing outside the sustainability report entities must meet cross-referencing requirements, including only to a report published for the same reporting entity and being available on the same terms and at the same time as the sustainability report. In addition, a cross-reference must refer to a precisely specified part of the other report.
ASIC reminded entities that the definition of climate-related targets includes those required by law or regulation, such as the Safeguard Mechanism in Australia.
Register of sustainability reporting relief decisions
ASIC continues to update its Sustainability Reporting and Audit Relief Decisions Register, detailing relief it has granted or refused to entities under the Act in relation to sustainability reporting and auditing matters. The register includes the rationale for its decisions.
The register aims to enhance transparency and provide prospective applicants with insights into the factors considered and conditions imposed when granting relief from preparing a sustainability report under Chapter 2M of the Act.
In assessing whether sustainability reporting requirements impose an unreasonable burden, ASIC considers:
- the policy objectives underlying the requirements in the Corporations Act 2001;
- the impact on users if relief is granted, including whether they will receive alternative disclosures aligned with Australian sustainability reporting requirements; and
- the extent to which the compliance burden is attributable to the entity’s structure or reporting choices.
ASIC is generally unlikely to grant relief solely because:
- the entity is privately owned, closely held, or has limited external users; or
- users of the climate-related financial information already have access to that information.
Listed disclosing entities may lodge sustainability reports electronically with the relevant market operator (ASX, NSX, SSX or Cboe) without lodging separate reports with ASIC. The relief applies to the lodgement of sustainability reports.
The relief is set out in ASIC Corporations (Electronic Lodgment of Financial and Sustainability Reports) Instrument 2026/59.
ASIC has provided sustainability reporting relief to related schemes. The relief allows a registered scheme, subject to certain requirements, to include the sustainability disclosures of its related schemes within a single sustainability report.
It extends the relief available for financial reports and directors’ reports to the sustainability report.
ASIC Corporations (Amendment) Instrument 2026/313 amends ASIC Corporations (Related Schemes Reports) Instrument 2025/438.
ASIC has provided relief for a stapled entity to prepare a sustainability report that includes climate-related financial disclosures on behalf of all the members of the stapled group. The relief applies where the sustainability report is prepared as if all the members in the stapled group are a single entity. ASIC Corporations (Reporting by Stapled Entities) Instrument 2023/673 extends the relief available to financial reports of stapled entities to sustainability reports.
2026-2027 Budget announcements
In May 2026, the Government announced proposed reforms to reduce the sustainability reporting burden.
Proposed doubling of large proprietary company (Group 3) thresholds
- Consolidated revenue: ↑ to $100 million
- Consolidated assets: ↑ to $50 million
Treasury will aim to consult on measures to reduce the reporting burden, including:
- improving consistency in the application of requirements ensuring assurance settings are proportionate and practical
- setting clearer boundaries for supplier information requests.
Keep greenwashing in mind
ASIC continues to focus and take action against greenwashing in sustainability-related claims, emphasising the importance of accurate and transparent disclosures.
ASIC's surveillance into entities’ sustainability claims highlight key concerns including:
- unsubstantiated sustainability strategies
- unsupported commitments
- inadequate disclosures of environmental and climate-related risks, particularly in high-risk sectors like mining, resources, and consumer staples.
In response, some entities and trustees have been required to amend or remove misleading statements across various disclosures.
Entities making any kind of sustainability-related claim should consider the guidance set out in ASIC Information Sheet 271 How to avoid greenwashing when offering or promoting sustainability-related products.
Entities preparing mandatory sustainability reports should be vigilant and mindful of greenwashing and avoid making false or misleading claims in these reports.
Contact our team
- Zuzana Paulech
- Julie Locke
- Julia Bilyanska
- Peter Trace
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