Starting 1 January 2025, large Australian businesses and financial institutions will be required to produce annual sustainability reports, including climate-related financial disclosures, under new legislation recently passed by Parliament.
The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 received Royal Assent on 17 September 2024, mandating these climate reporting obligations. ASIC Commissioner Kate O’Rourke encourages impacted entities to actively engage with these requirements, emphasising the importance of setting up effective governance and sustainability processes before the new rules take effect.
“This reform has substantial implications for our stakeholders, and ASIC acknowledges the transition period needed for businesses to build their reporting capabilities,” said Commissioner O’Rourke. “Our approach to supervision and enforcement will consider this adjustment phase, ensuring a balanced and practical implementation.”
To aid in this transition, ASIC is maintaining standards for voluntary disclosures and protecting against misleading conduct. Additionally, a dedicated sustainability reporting resource is available on the ASIC website to support reporting entities, with updates and regulatory guidance to be added over time.
ASIC also plans to consult with stakeholders to develop specific guidance on meeting these reporting obligations and how these will align with current legal requirements.
As more stakeholders factor environmental sustainability into financial decision-making, the importance of climate disclosure continues to grow. Enhanced climate reporting will benefit entities, providing them with insights into their climate-related risks and opportunities over varying timeframes.
Phased Reporting Rollout
The new climate reporting will phase in across three groups over the next three years:
- Group 1: Entities with $500 million in revenue, $1 billion in assets, or 500+ employees, starting their reporting from 1 January 2025.
- Group 2: Entities with $200 million in revenue, $500 million in assets, or 250+ employees, beginning from 1 July 2026.
- Group 3: Entities with $50 million in revenue, $25 million in assets, or 100+ employees, commencing from 1 July 2027.
ASIC advises all reporting entities, including those in later groups, to start preparing for these requirements now. Visit ASIC’s sustainability reporting page for more information on the new regime and ongoing guidance.