26-222MR ASIC observes improved sustainability reporting and notes areas for further development

ASIC has observed that the quality, quantity, and consistency of climate-related financial information in the market has increased with the introduction of statutory sustainability reporting requirements.

ASIC Commissioner Kate O’Rourke said ASIC’s review of a sample of 40 sustainability reports, detailed in Report 839 ASIC's review of sustainability reports lodged for 31 December 2025 (REP 839), identified marked progress in disclosure reporting compared to disclosures previously made voluntarily.

‘It appears that statutory reporting has not only resulted in heightened transparency, but also more meaningful engagement by entities with climate-related risks and opportunities,’ Ms O’Rourke said.

‘We saw examples of entities adapting or updating existing governance and risk management processes.’

ASIC identified opportunities for improvements in forward-looking disclosures and those underpinned by assumption or judgement, for example in aspects of strategy and metrics and targets disclosures.

To assist reporting entities, ASIC has outlined eight practical action items to consider when preparing sustainability reports, which include, and where relevant expand upon, the early observations on sustainability reporting published in May.

‘We expect improvements over time as more information becomes available and as entities gain more experience,’ Ms O’Rourke said.

ASIC is engaging with Treasury on reforms to improve the efficiency of climate-related financial disclosures.

‘We are supportive of measures that reduce regulatory burden whilst preserving core sustainability reporting requirements and will continue to engage with Treasury on these proposed reforms,’ Ms O’Rourke said.

‘The findings in this report are designed to provide reporting entities with timely and accessible feedback on what we have observed to reduce regulatory uncertainty while also improving the quality of climate-related information for users.’

In the 2026-27 financial year, ASIC will review a sample of sustainability reports lodged by Group 1 entities with financial years ending 30 June 2026 and will also continue engaging with large audit firms to understand the assurance methodologies adopted for sustainability reports.

Background

Australia’s statutory sustainability reporting requirements, which commenced for the largest entities for financial years beginning on or after 1 January 2025, aims to improve the quality, consistency and comparability of climate-related financial disclosures. They apply to large businesses and financial institutions required to prepare and lodge financial reports under the Corporations Act 2001 (Corporations Act).

Sustainability reports help users of the information to make informed decisions and promote confidence and integrity in Australia’s capital markets.

The sustainability reporting requirements are being phased in over three years across three groups. The first group of reporting entities with financial years ending 31 December 2025 have now lodged their sustainability reports with ASIC.

Since our early observations published in May, an additional 53 sustainability reports have been lodged by entities with financial years ending 31 December 2025, bringing the total number of sustainability reports lodged by this cohort to 312.

ASIC will continue to support the implementation of the sustainability reporting requirements through guidance, education and, where appropriate, regulatory relief.

Downloads