ASIC publishes sustainability reporting regulatory guide

Following extensive consultation with stakeholders, ASIC has published a regulatory guide on sustainability reporting after the commencement on 1 January 2025 for the first cohort.

The second and third reporting cohorts would be required to prepare annual sustainability reports for the financial years commencing on or after 1 July 2026 and 1 July 2027, respectively.

The newly unveiled guide, ‘Regulatory Guide 280 Sustainability reporting’ (RG 280), was published to guide entities that were required to prepare a sustainability report containing climate-related financial information under chapter 2M of the Corporations Act 2001.

ASIC said the guide could apply to companies, registered schemes, registrable superannuation entities, and retail corporate collective investment vehicles.

“RG 280 includes guidance on determining who must prepare a sustainability report under the Corporations Act, the content required in the sustainability report, disclosing sustainability-related financial information outside the sustainability report (such as in disclosure documents and product disclosure statements), and ASIC’s administration of the sustainability reporting requirement (including our specific approach to considering relief and use of our new directions power),” ASIC said.

The published guidance followed a draft regulatory guide for consultation released late last year on 7 November.

According to ASIC, 60 submissions were received from key stakeholders, including entities, industry associations, law firms, advisory and audit service providers, academics, and consultants.

Kate O’Rourke, commissioner of ASIC, said there was broad support for ASIC to provide guidance on the new sustainability reporting requirements in a regulatory guide.

“Climate-related financial information that is consistent, comparable and of high quality, facilitates confident and informed decision making by investors and other users of that information,” she said.

“The publication of RG 28 is a critical piece that supports the implementation of these sustainability reporting requirements passed by the Australian parliament. We will continue to expand our broader suite of publications related to sustainability reporting over time as market practices evolve.”

Based on feedback, ASIC said it had added sections to RG 280 on climate scenario analysis and disclosing scope three greenhouse gas emissions, included more specific guidance for directors of reporting entities and additional guidance on applying the sustainability reporting thresholds.

ASIC also revised its position on the labelling of sustainability-related information in sustainability reports and updated guidance on disclosing sustainability-related financial information outside of the sustainability report.

Rourke said the corporate regulator would also aim to provide information about a “pragmatic and proportionate approach” to the supervision and enforcement of the sustainability reporting requirements by considering how it could support entities.

It would also look to engage with reporting entities to understand the basis of disclosures in sustainability reports, where it would identify if a statement in a sustainability report was incorrect or misleading in any way.

“If concerns remain, we may provide reporting entities with an opportunity to make changes or exercise our new directions power and more likely commence an enforcement investigation where we see misconduct of a serious or reckless nature, or where a reporting entity fails to prepare a sustainability report required under the corporations act,” ASIC said.

Rourke noted that ASIC had also provided relief to allow stapled entities to prepare a consolidated sustainability report for the stapled group.

“ASIC will consider any applications seeking other relief from the sustainability reporting and audit requirements. These may take some time to consider in the early days as they may raise complex or novel issues,” she said.

“Industry stakeholders can refer to RG 280 and the sustainability reporting page on the ASIC website for more information.”