Corporate, markets, and financial services regulator the Australian Securities & Investments Commission (ASIC) announced the release of “Regulatory Guide 280 (RG 280),” its new regulatory guide for companies required to prepare a sustainability report containing climate-related financial information under Australia’s new mandatory climate reporting law.

The guide includes details on ASIC’s planned “pragmatic and proportionate approach” to supervision and enforcement in the early years of the new sustainability reporting requirements, including its plans to focus enforcement investigations on serious or reckless misconduct, and to engage directly with companies if the regulator identifies incomplete or misleading information as the new requirements are being phased in.

The publication of the new guide follows the passage in September 2024 by Australian lawmakers of the Treasury Laws Amendment Act, introducing mandatory climate-related reporting requirements for large and medium sized companies, including disclosures on climate-related risks and opportunities, and on greenhouse gas emissions across the value chain, starting as soon as 2025 for the largest companies.

ASIC is responsible for administering the new sustainability reporting requirements and monitoring compliance.

Reporting requirements will apply to all public companies and large proprietary companies required to provide audited annual financial reports to ASIC that meet specific size thresholds, starting with companies with over 500 employees, revenues over $500 million or assets over $1 billion, as well as asset owners with more than $5 billion in assets. For medium sized companies (250+ employees, $200 million+ revenue, $500 million assets), reporting requirements will begin in July 2026, and smaller companies (100+ employees, $50 million+ revenue, $25 million+ assets) will begin one year later.

Key topics covered in the guide include details on who must prepare sustainability reports, sustainability reporting thresholds, the content required in sustainability reports, disclosing sustainability-related financial information outside the sustainability report, and ASIC’s approach to supervision and enforcement.

The guide includes a section on “ASIC’s approach to supervision and enforcement during the early years of sustainability reporting,” stating that the regulator plans to “take a proportionate and pragmatic approach to supervision and enforcement as the requirements are being phased in,” with plans including considering granting relief from the sustainability reporting and audit requirements if certain conditions are met, and considering how to support reporting companies through guidance. The section also notes that if ASIC identifies sustainability report information that is incorrect, incomplete or misleading, it will directly engage with the company to understand the basis for the disclosures and provide opportunities to make changes, and that it will be more likely to begin enforcement investigations “where we see misconduct of a serious or reckless nature, or where a reporting entity fails to prepare a sustainability report for the financial year.”

In the guide, ASIC stated:

“The sustainability reporting requirements are new for Australia. Both market practice and policy developments relating to climate-related financial disclosures will also continue to evolve both domestically and internationally.”

ASIC released a draft of the guide in November, 2024, and following feedback, the regulator made a series of changes to the final document, including adding sections on climate scenario analysis and disclosing scope 3 greenhouse gas emissions, including more specific guidance for directors of reporting entities, and additional guidance on applying the sustainability reporting thresholds, among other updates.

ASIC Commissioner Kate O’Rourke said:

“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.”

Click here to view the new guide.