The Australian Securities & Investments Commission (ASIC) used a keynote address by Commissioner Kate O’Rourke to outline how it will administer and supervise Australia’s new mandatory climate-related reporting regime, including the practical support it plans to provide to reporting entities and its approach to enforcement during the phase-in. The framework is being introduced in three cohorts based on entity size, with Group 1 reporting periods starting on 1 January 2025 and first reports expected in March 2026, and Group 2 and Group 3 commencing on 1 July 2026 and 1 July 2027 respectively. Sustainability reporting will form a fourth component of the annual report and must include climate statements and a directors’ declaration, covering matters such as material climate-related risks and opportunities, metrics and targets, governance, strategy and risk management, and the use of climate-related scenario analysis. ASIC highlighted its March 2025 sustainability reporting guide (Regulatory Guide 280), noting that it was revised following 60 consultation submissions, including additions on scenario analysis and scope 3 greenhouse gas emissions, more specific guidance for directors, and updated guidance on sustainability-related financial information outside the sustainability report. ASIC also changed its position on “labelling”, indicating it will administer the law on the basis that entities may include additional sustainability-related information in the sustainability report, provided the mandatory climate-related financial information is clearly identified and not obscured. ASIC reported it is reviewing applications for relief from sustainability reporting and audit obligations, and intends to publicise how it is approaching novel issues to help the market understand its exercise of discretion, while encouraging early applications. It also plans educational materials aimed at Group 3 companies and small and medium-sized suppliers to reporting entities. On enforcement, ASIC said it will take a pragmatic and proportionate approach early on, with action more likely in cases of serious or reckless misconduct or failure to prepare a sustainability report, supported by interventions including engagement and a new directions power to require corrections of statements considered incorrect, incomplete or misleading; its posture on greenwashing will remain grounded in long-standing prohibitions on misleading and deceptive conduct.
Australian Securities & Investments Commission 2025-05-29
Australian Securities & Investments Commission sets out guidance, relief and enforcement stance for phased mandatory climate reporting
The Australian Securities & Investments Commission (ASIC) detailed its management of Australia's new mandatory climate-related reporting regime during a keynote by Commissioner Kate O’Rourke. The framework, introduced in three cohorts by entity size, adds sustainability reporting to annual reports, covering climate risks, metrics, governance, and scenario analysis. ASIC updated its sustainability guide, Regulatory Guide 280, to include scenario analysis and scope 3 emissions. ASIC is reviewing relief applications, planning educational materials for smaller entities, and will focus on serious misconduct and greenwashing in enforcement.