The Australian Securities & Investments Commission (ASIC) has released a new draft regulatory guide on the soon-to-be-introduced sustainability reporting regime, inviting feedback from stakeholders as part of its consultation process.
The mandatory climate reporting bill was passed by the Australian Senate on 22 August, requiring many large Australian businesses and financial institutions to prepare annual statutory sustainability reports containing climate-related financial disclosures from 1 January 2025.
The reporting requirements will be phased in over the next three years across three groups of reporting entities.
ASIC’s draft Regulatory Guide 000 Sustainability reporting (Draft RG 000) includes guidance on who must prepare a report, how the regime will interact with existing legal obligations and how the corporate regulator will administer reporting requirements.
It also features specific guidance on granting relief from the regime and the use of ASIC’s new directions of power.
“Our focus for this regulatory guide is to assist preparers of sustainability reports to comply with their obligations so that users are provided with high-quality, decision-useful, climate-related financial disclosures that comply with the law and the sustainability standards,” said ASIC Commissioner Kate O’Rourke.
ASIC’s Consultation Paper 380 Sustainability reporting (CP 380) asks stakeholders to provide their feedback on the draft guide by 19 December 2024.
It specifically asks for comment on whether any ASIC legislative instruments that grant relief in relation to financial reporting or audit requirements should be extended to sustainability reporting, while seeking feedback on any other areas where ASIC should support the introduction of the sustainability reporting regime.
O’Rourke said the regulator will take a “proportionate and pragmatic approach” to supervision and enforcement during the transition period.
“We want industry to engage with our draft guidance and what we are proposing. Their feedback will help us to ensure that we can effectively support the implementation of the sustainability reporting regime,” she said.
“We recognise that there will be a period of transition whilst entities build their capability, as reflected in the phasing in of requirements and modified liability provisions.”
To find out what procurement teams need to know about mandatory climate reporting, see PASA’s exclusive article with Edge Impact’s Tanya Harris and Laura Reed.
