The Australian Securities and Investments Commission (ASIC) has reported significant improvements in the quality, quantity, and consistency of climate-related financial disclosures following the introduction of statutory sustainability reporting requirements.
According to Report 839 (ASIC’s review of sustainability reports lodged for 31 December 2025), which examined a sample of 40 filings, reporting entities demonstrated marked progress compared to previous voluntary disclosures.
ASIC Commissioner Kate O’Rourke noted that statutory reporting has driven heightened transparency and fostered deeper entity engagement with climate-related risks and opportunities, with several organisations adapting governance and risk management frameworks accordingly.
However, the regulator identified areas needing refinement, particularly regarding forward-looking disclosures and statements underpinned by assumptions or judgments within strategy, metrics, and target framework disclosures. To assist reporting entities, ASIC has outlined eight practical action items to guide future report preparation, expanding upon initial observations published in May.
The regulator confirmed it is engaging with the Australian Treasury on potential reforms aimed at reducing regulatory burdens while maintaining core sustainability reporting standards. ASIC indicated that the findings are intended to reduce regulatory uncertainty and enhance information quality for market participants.
Australia’s statutory sustainability reporting framework began phasing in for the country’s largest entities (Group 1) for financial years starting on or after 1 January 2025 under the Corporations Act 2001. Following the recent submission deadline for entities with financial years ending 31 December 2025, a total of 312 sustainability reports have been lodged with ASIC.
Looking ahead to the 2026–27 financial year, ASIC plans to review sustainability reports lodged by Group 1 entities with financial years ending 30 June 2026. The regulator will also maintain ongoing engagement with major audit firms to evaluate assurance methodologies applied to sustainability disclosures.
