A draft guide titled “Regulatory Guide 000 Sustainability Reporting” has been issued by the Australian Securities & Investments Commission, outlining Australia’s new sustainability reporting regime and ASIC’s approach to administering those requirements. The Treasury Laws Amendment Act recently included the regulation on climate-related reporting for large and medium-sized companies operating in Australia, mandating disclosures by these corporations on climate risks, opportunities, and greenhouse gas emissions across the value chain. ASIC Commissioner Kate O’Rourke said the regulator would take a “proportionate and pragmatic” approach to enforcement, acknowledging a “period of transition” to help companies build up reporting capacity.
The new reporting obligations, which will begin as early as 2025 for the largest companies, apply to all public companies and large proprietary firms exceeding certain threshold. It focuses on the first two phases on companies with more than 500 employees, having revenues over $500 million, and assets over $1 billion, and asset owners with assets in excess of $5 billion. Medium-sized firms with over 250 employees with revenues of $200 million and assets of $500 million will begin adopting it in 2026, while smaller firms with more than 100 employees, revenue of $50 million, and assets totaling $25 million will be compelled to adopt it by 2027.
It also includes provisions to support firms in making such a transition, such as phased-in reporting of Scope 3 emissions: additional time to report indirect value chain emissions and modified liability provisions to ease compliance. ASIC’s exposure draft report offers guidelines on which organisations are obliged to prepare sustainability reports, the content requirements, record-keeping obligations and directors’ duties together with advice on how sustainability-related financial information outside of the sustainability report should be disclosed.
ASIC stated that it is aware that many companies will be reporting on sustainability for the first time and that there is an evolution of practice and policy around climate-related disclosures, both domestically and internationally. The draft guidance is out for consultation until December 19, 2024, for comments on, but not limited to, compliance costs, potential competitive impacts, and any alternatives that may be possible. ASIC expressed its interest in a smooth transition and support for reporting entities, saying that it will take a balanced and pragmatic approach to supervision and enforcement in this period.
O’Rourke also added that the regulatory guide is to help report preparers in meeting their obligations and in the process ensure that users receive high-quality, legally compliant, and decision-useful climate-related financial disclosures.