ASIC reviews sustainability reports
ASIC has released Report 839 ASIC’s review of sustainability reports lodged for 31 December 2025, which provides its first assessment of reporting practices under Australia’s mandatory climate-related financial disclosure regime.
40 sustainability reports were reviewed, split evenly between listed and unlisted entities. Their overall assessment is that this statutory reporting has increased the quality, quantity and consistency of climate–related financial information compared with previous voluntary reporting. They noted that the new reporting requirements were prompting entities to revisit their governance and risk management processes.
RASIC has identified 8 key actions for entities preparing future sustainability reporting, which adds to their feedback published in May this year:
- Connect sustainability and financial reporting – explain how the two relate to each other, including cross-industry metrics and current and anticipated financial effects
- Consider quantitative financial information – where material current and anticipated financial effects are disclosed qualitatively, consider whether quantitative information can also be provided and if not, explain why not
- Take a broad view of climate-related risks and opportunities - consider past events, current and forecast conditions, and direct and indirect effects throughout the entire value chain
- Make judgements and uncertainty transparent - provide clear and effective relevant judgements, assumptions and areas of measurement uncertainty, including those underpinning the identification of risks and opportunities, and calculation of cross industry metrics
- Consider mandatory climate-related targets – AASB S2’s of climate-related targets extends to those an entity is required to meet by law or regulation, including the Safeguard Mechanism
- Keep material information prominent - additional voluntary climate information should not obscure material climate–related financial information
- Apply the cross–referencing requirements carefully - information that is cross- referenced must, amongst other requirements, be available on the same terms and at the same time as the sustainability report
- Avoid inappropriate disclaimers - disclaimers that conflict with the statutory report reporting framework and may confuse or mislead users should not be used. ASIC believes indicating unit should not rely on the information contained in the sustainability report stating that the entity took no responsibility for the act curacy or completeness of certain information to be “problematic and contrary to the legislative policy of Chapter 2M sustainability reporting”
Disclaimer: This does not purport to be comprehensive or to render legal advice. You should not act based on any information contained in this publication without first obtaining specific professional advice. Consult your legal advisor to determine if this applies to you.