The Australian Securities & Investments Commission has published early observations from its review of the first sustainability reports lodged under Australia’s mandatory sustainability reporting regime, finding that climate-related disclosure is generally more extensive and consistent than under the previous voluntary framework but that several reporting practices still need improvement. The observations are intended to help entities preparing reports under Chapter 2M of the Corporations Act 2001 and AASB S2 Climate-related Disclosures for the 30 June 2026 reporting season. Based on a desktop review of a sample of listed entities’ reports, ASIC said entities must not use disclaimers that conflict with the statutory framework, including statements that users should not rely on the report for investment decisions or that the entity does not accept responsibility for parts of the information. It also highlighted the need to use past events, current conditions and forecast conditions when identifying climate-related risks, to disclose judgements, assumptions and measurement uncertainty more clearly, and to avoid obscuring material required information with additional voluntary climate content. Cross-references must be limited to precisely specified parts of other reports published by the entity and available on the same terms and at the same time. ASIC also pointed to uneven treatment of climate-related targets, noting that AASB S2 includes targets imposed by law or regulation, such as greenhouse gas emissions targets under the Safeguard Mechanism. As of 6 May 2026, 259 sustainability reports for 31 December 2025 year ends had been lodged with ASIC, including 34 from listed entities and 225 from unlisted entities. The review will continue over the coming months, ASIC may engage directly with reporting entities about their disclosures, and final observations are due in the second half of 2026.
Australian Securities & Investments Commission2026-05-18
Australian Securities & Investments Commission flags disclosure gaps in first mandatory sustainability reports
The Australian Securities & Investments Commission has issued early observations on the first sustainability reports under Australia’s mandatory regime, noting more consistent climate-related disclosure than under the previous voluntary framework but identifying several practices requiring improvement. ASIC warns against disclaimers that conflict with the statutory framework, calls for clearer disclosure of climate-related risks, judgements and assumptions, tighter use of cross-references, and proper treatment of legally imposed climate targets.