Sustainability reporting and audit relief decisions register

We granted relief to a large proprietary company that had recently been acquired from the requirement to prepare a sustainability report for the financial year ended 30 June 2026. The applicant sought relief after its financial year was extended to 18 months as part of aligning its financial year with that of its parent company. The extended transitional financial year caused the applicant to meet the Group 1 reporting threshold for that period.

We granted relief because we were satisfied that compliance with the relevant sustainability reporting requirements would impose unreasonable burdens and may be inappropriate in the circumstances because:

• under s323D(3) of the Corporations Act, the applicant’s parent was required to align the financial years of entities in the consolidated group following the acquisition
• s323D(4) permitted the applicant’s transitional financial year to be extended to 18 months for that purpose, which caused the applicant to meet the Group 1 reporting threshold earlier than would have been the case under its ordinary 12-month financial year, and
• if assessed over its ordinary 12-month financial year, the applicant would have been a Group 2 reporting entity and would not have been required to prepare a sustainability report for that period.

We granted relief to a large proprietary company from the requirement to prepare sustainability reports for the financial years ending 30 June 2026 and 30 June 2027.

The applicant is a Ch 2M reporting entity and satisfies the emissions threshold for reporting as part of Group 1 because it is a registered controlling corporation under the National Greenhouse and Energy Reporting Act 2007. It does not otherwise meet the Group 1 size threshold.

The applicant acts as a cost-reimbursed manager and agent of an unincorporated joint venture on behalf of its two shareholders, who are the joint venture participants. It does not own the underlying joint venture assets, does not generate revenue from those operations, and its financial statements do not recognise the assets, liabilities, revenue or expenses of the joint venture operations.

We were satisfied that compliance would impose unreasonable burdens because:

• the substantive financial exposure to the joint venture operations sits with the joint venture participants, including where climate-related risks increase operating costs
• the climate-related risks and opportunities, and greenhouse gas emissions, associated with the joint venture operations are expected to be addressed through the sustainability reports of the joint venture participants that bear the substantive financial exposure, where material, and
• in those circumstances, a standalone sustainability report was unlikely to provide primary users with additional useful climate-related financial information relative to the costs of compliance.

Each shareholder must consider whether climate-related risks or opportunities associated with the company are material and, if so, disclose that information in its sustainability report in accordance with AASB S2 Climate-related Disclosures.

The company’s financial report must contain a summary of the relief provided.

We made an in-principle decision to refuse relief to a large proprietary company that had sought relief to prepare its own consolidated sustainability report. However, we granted relief to the applicant so that its sustainability report may cross-reference the sustainability reports of three operating subsidiaries for the financial years ending 31 December 2025, 31 December 2026 and 31 December 2027.

The applicant is a non-operating holding company that satisfies the threshold for reporting as a Group 1 reporting entity. Its group conducts its operational activities through three separate operating subsidiaries, each of which prepares its own financial report and sustainability report.

We were not satisfied that compliance would be inappropriate in the circumstances or impose unreasonable burdens because:

• a non-operating holding company structure is not, of itself, unusual within corporate groups
• separate subsidiary-level reports would present climate-related financial information from the perspective of each operating subsidiary, rather than providing users with a consolidated view of climate-related risks and opportunities across the group as a whole, and
• replacing parent-level sustainability reporting with separate subsidiary reports would make it harder for users to connect the climate-related financial information in those reports with the parent’s financial statements for the consolidated group.

We granted relief allowing cross-referencing to the three operating subsidiaries’ sustainability reports because once applicant-level consolidated group reporting was retained, we accepted that requiring all relevant information to be presented within the applicant’s sustainability report, rather than by cross-reference, would impose unreasonable burdens in the circumstances. The applicant remains responsible for reporting at its own entity level.

The sustainability report of the company may cross-reference information contained in its three operating subsidiaries’ sustainability reports, provided it is done in accordance with paragraphs B45–B47 of AASB S2 Climate-related Disclosures and those subsidiary sustainability reports are annexed to the company’s sustainability report.

The sustainability report contains a summary of the relief.

We made an in-principle decision to refuse relief to a large proprietary company that is an incorporated joint venture from the requirement to prepare and comply with the sustainability reporting requirements in Ch 2M.

The applicant satisfies the threshold for reporting as a Group 1 reporting entity and operates a significant standalone mining operation under a joint venture structure. It sought ongoing relief on the basis that its operations would be considered by, and included in, the sustainability report of its majority owner and operator.

We were not satisfied that compliance would impose unreasonable burdens because:

• reporting by the majority owner and operator would not be an adequate substitute for the applicant’s own reporting because climate-related financial information about the applicant would be assessed through that entity’s group-level materiality assessment and presented from its broader group perspective, rather than at the applicant level, and
• including 100% of the applicant’s operations in the majority owner and operator’s sustainability report, while accounting for the applicant as an equity investment in that entity’s financial statements, would make it harder for users to understand the connection between that entity’s sustainability disclosures and the related financial statements.

We made an in-principle decision to refuse relief for a large proprietary company from the requirement to prepare a sustainability report for the financial year ending 30 June 2026. The applicant sought relief on the basis that an acquisition completed at the start of the financial year caused it to become subject to the sustainability reporting requirements earlier than anticipated.

We were not satisfied that compliance with the relevant sustainability reporting requirements would impose unreasonable burdens because:

• before the acquisition, the applicant already satisfied one criterion and was close to satisfying another, so becoming subject to the sustainability reporting requirements was reasonably foreseeable
• RG 280.34 explains that sustainability reporting requirements are assessed at the end of the financial year and that entities should have systems to monitor whether acquisitions, restructures or changing conditions may bring them within scope, and
• the acquisition was completed at the start of the financial year, giving the applicant a substantial period to prepare for compliance.

We refused relief for a large proprietary company from the requirement to prepare a sustainability report for the financial years ending 30 June 2026 and 30 June 2027. The applicant sought relief on the basis that it met the Group 1 reporting threshold only because of a fixed-term contractual arrangement with no option for renewal. The applicant submitted that, once that contractual arrangement ends, it is expected to no longer meet the sustainability reporting thresholds and to become a small proprietary company.

We were not satisfied that compliance with the relevant sustainability reporting requirements would impose unreasonable burdens because:

• the applicant’s expected exit from the regime when the fixed-term contractual arrangement ends with no renewal option does not, of itself, justify relief. Entities may enter and exit the regime as their circumstances change, and a limited reporting period did not demonstrate that compliance for the relevant financial years would be inappropriate or that the sustainability report would be of limited utility to users
• existing reporting to other regulators, government agencies or insurers did not replace the requirement to prepare a sustainability report under the Corporations Act, as those disclosures are made under different frameworks, for different purposes and for different audiences, and
• the applicant’s view that its climate-related risks and opportunities were limited did not justify relief. The reporting process is intended to assess and disclose material climate-related information, and limited expected disclosures do not, of themselves, make compliance inappropriate or unreasonable.

We granted relief to three separate companies, including a listed company and large proprietary companies, for the financial years ended 31 December 2025 and 30 June 2026 from the requirement to prepare a sustainability report where an acquisition completed late in the reporting period caused the applicant to become subject to the Group 1 sustainability reporting requirements earlier than anticipated.

We granted relief because we were satisfied that compliance with the relevant sustainability reporting requirements would impose unreasonable burdens in circumstances where:

• in relevant cases, the applicants were close to meeting the relevant reporting thresholds before the acquisition was completed, but only became subject to the sustainability reporting requirements because of an acquisition completed late in the reporting period
• the timing of the acquisition activity left very limited time before year end to establish the systems, governance arrangements and reporting processes needed to prepare a sustainability report, and
• in relevant cases, confidentiality and uncertainty about whether, or when, the acquisition would complete further limited the ability to prepare for compliance in advance.

We granted relief to allow a subsidiary to lodge its parent company’s global group consolidated sustainability reports instead of an individual stand-alone sustainability report for two financial years on the basis that those sustainability reports will be prepared in accordance with a sustainability standard equivalent to AASB S2 Climate-related disclosures, and be subject to assurance in accordance with an auditing standard equivalent to ASSA 5000 General Requirements for Sustainability Assurance Engagements (ASSA 5000).

The parent is a Canadian incorporated company listed on the Toronto Stock Exchange (TSX). The subsidiary is a wholly owned proprietary company that meets the threshold for sustainability reporting as part of Group 1.

The subsidiary is also the holding company for unlisted wholly owned New Zealand incorporated entities with all of its material operations conducted in New Zealand.

We granted relief because we were satisfied that compliance with the relevant sustainability requirements would impose unreasonable burdens on the subsidiary where:

• the parent will prepare a sustainability report for the global consolidated group in accordance with a standard equivalent to AASB S2 Climate-related disclosures and that report will be assured under an auditing standard equivalent to ASSA 5000
• the subsidiary’s climate-related risks and opportunities arise primarily from its New Zealand operations, which are material to the parent, and
• in these circumstances, a standalone report would be unlikely to provide material additional information about the subsidiary’s climate-related risks and opportunities that is useful to primary users of the subsidiary’s financial reports.

The subsidiary lodges with ASIC its parent’s global group consolidated sustainability report and that sustainability report:

• has been prepared in accordance with a sustainability standard that is equivalent to AASB S2 Climate-related disclosures
• has been subject to assurance in accordance with an auditing standard equivalent to ASSA 5000, and in accordance with the assurance phasing specified in ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001,
• includes a declaration by the directors of the parent that has been made in accordance with s296A(7), and
• is publicly available on the parent’s website.

The financial report of the subsidiary contains a summary of the relief provided.

We made an in-principle decision to refuse relief to two entities from the requirement to prepare sustainability reports for the financial year ended 31 December 2025 (FY25). The entities are both large proprietary companies and are required to prepare and lodge a Ch 2M financial report and a sustainability report for FY25.

The applicant submitted that preparing and issuing a sustainability report would impose unreasonable burdens, because although not in external administration, the group is currently experiencing financial distress. The applicant also submitted that an ongoing, incomplete transaction was expected to result in organisational and leadership changes, and that any future strategy would be determined by the incoming owners.

We were not satisfied that compliance with the sustainability reporting requirements would impose unreasonable burdens because:

• the applicants are not in external administration, and granting an exemption would be broader than the relief available in ASIC Corporations (Externally Administered Bodies) Instrument 2015/251
• the costs of establishing systems and processes are considered costs ordinarily incurred in complying with the legislation, and will support future reporting, and
• restructuring uncertainty and anticipated ownership changes do not prevent reporting and can be addressed through appropriate disclosures.

We refused to grant relief to allow a subsidiary to lodge its parent company’s global group consolidated sustainability report instead of an individual standalone sustainability report for the financial year ended 31 December 2025 (FY25).

The subsidiary sought relief from preparing a standalone sustainability report for FY25 on the basis that the parent company’s global consolidated sustainability report, prepared under the European Corporate Sustainability Reporting Directive (CSRD), would include information relating to the subsidiary and would largely align with the requirements of AASB S2.

The subsidiary is a wholly-owned large proprietary company that meets the threshold for sustainability reporting as a Group 1 entity. Its parent company is a multinational company incorporated in France, listed on Euronext Paris, and subject to the European CSRD.

We refused relief as we were not satisfied that compliance with the sustainability reporting requirements would impose unreasonable burdens, or otherwise be inappropriate in the circumstances, for the following reasons:

• granting relief would be inconsistent with the connected information requirements in AASB S2
• relief would reduce the usefulness and comparability of climate-related financial disclosures to users because the European CSRD is not equivalent to AASB S2
• the costs incurred by the subsidiary are considered part of the ordinary administrative costs of complying with the sustainability reporting requirements, and
• the fact that a reporting entity is privately owned, has a limited number of known external users, or that users may already have access to climate-related financial information does not, of itself, make compliance inappropriate in the circumstances.

We granted relief to 46 subsidiaries so that they do not have to prepare standalone sustainability reports for the financial years ended 31 December 2025, 31 December 2026 and 31 December 2027, on the basis that those entities are included in the parent entity’s DLC-consolidated sustainability prepared in accordance with AASB S2 Climate-related Disclosures for the relevant periods.

We also granted relief for the avoidance of doubt to allow the parent entity operating under a dual-listed companies (DLC) structure to prepare and lodge a DLC-consolidated sustainability report (instead of a single entity sustainability report).

The parent entity has individual financial reporting relief to enable it to prepare and lodge DLC-consolidated financial reports. As a result, because the parent entity is required by an ASIC instrument (and not the Australian accounting standards) to prepare consolidated financial statements, it cannot elect to prepare a consolidated sustainability report under s292A(2)(b) of the Corporations Act for the DLC structure.

We granted relief because we were satisfied that requiring each subsidiary to prepare a standalone sustainability report would impose unreasonable burdens, where users will have the benefit of a consolidated sustainability report prepared in compliance with the requirements in the Corporations Act and AASB S2.

This is consistent with s292A(2), which allows an Australian parent entity to prepare consolidated sustainability reports on behalf of its group where it is required to prepare consolidated financial statements. In this case, the parent entities under the DLC arrangements operate together as a single economic enterprise and are required to prepare consolidated financial statements for the DLC.

The relief ensures that, where ASIC has modified the parent entity’s financial reporting obligations by way of a previous exemption order, that parent’s financial and sustainability reporting obligations will be treated in a consistent manner – in line with the policy intention of the sustainability reporting requirements. This benefits users of the general purpose financial reports by aligning the reporting boundaries of the parent’s financial statements and climate-related financial disclosures.

We made an in-principle decision to refuse relief from the requirement to prepare a sustainability report for the financial year ending 31 December 2025 (FY25) and onwards to a large proprietary company that prepares and lodges financial reports under Ch 2M.

Relief was sought on the basis that preparation of a sustainability report by the applicant would either:

• result in a misleading report because the applicant operates as a holding company with only an indirect ownership interest in the underlying operating companies and does not have operational control over those companies (a number of which are foreign-incorporated companies that operate overseas), or
• inappropriate in the circumstances and unreasonably burdensome because the disclosures would be partly duplicative of disclosures in the sustainability report that will be prepared under the Corporations Act by another Australian entity within its corporate group.

We were not satisfied that compliance with the relevant sustainability reporting requirements would make the sustainability report misleading, be inappropriate in the circumstances, or impose unreasonable burdens because:

• the financial reporting and sustainability reporting requirements in Ch 2M are intended to apply to entities that have reached a size of economic significance to the Australian economy, including holding companies that have no direct operations of their own
• AASB S2 requires the disclosure of material information about climate-related financial risks and opportunities that could reasonably be expected to affect the reporting entity’s prospects, regardless of where the underlying operations are located globally or the level of control that the entity has over those operations, and
• reporting entities are required to prepare financial and sustainability reports reflecting their own financial position, financial performance and cash flows, even where there are other reporting entities with similar financial interests or risk exposures. This may result in some duplication between different entities’ Ch 2M reports, but is not necessarily an unintended consequence of the legislation.

We granted relief to allow an entity that is a part of a stapled group not to prepare a sustainability report for the financial years ended 31 December 2025 and 31 December 2026.

The stapled group is listed on the ASX and comprises the entity, which is a company that is stapled to a trust, and their respective controlled entities. The responsible entity of the trust is a wholly owned subsidiary of the entity.

The entity is a public company and does not meet the Group 1 corporate size threshold for sustainability reporting. However, the entity meets the Group 1 emissions threshold for sustainability reporting because it is a registered corporation under the National Greenhouse and Energy Reporting Act 2007 and manages the assets owned by the registered scheme.

The registered scheme meets the Group 2 value of assets threshold for sustainability reporting as an asset owner and therefore is not required to prepare a sustainability report until the financial year ended 31 December 2027.

We granted relief to allow the entity not to prepare a sustainability report separate to the stapled group because we were satisfied that compliance would impose unreasonable burdens where:

• the entity will need to establish systems, processes and incur audit costs for only two reporting periods, before its operating activities are incorporated into the stapled group’s consolidated sustainability report in the financial year ended 31 December 2027, and
• the incremental benefit to primary users of the entity’s financial reports would be outweighed by the associated commercial costs of preparing the entity’s standalone sustainability reports for two reporting periods only.

We made an in-principle decision to refuse relief to a parent entity and its two wholly owned subsidiaries from the requirement for each of them to prepare a consolidated sustainability report for the financial year ended 31 December 2025, where the applicants proposed that each entity instead lodge a standalone sustainability report.

The group comprises a parent entity and two wholly owned subsidiaries, each of which prepares consolidated financial reports under Ch 2M and meets the Group 1 threshold for sustainability reporting. The two wholly owned subsidiaries also hold wholly owned subsidiaries that meet the Group 3 threshold for sustainability reporting.

The applicants each propose to prepare standalone sustainability reports rather than a consolidated sustainability report. This is on the basis that they each operate independently with distinct businesses, and that standalone sustainability reports would better reflect how sustainability is managed.

We made an in-principle decision to refuse relief on the basis that relief was not required. Paragraph 292A(2)(b) of the Corporations Act provides the parent entity of a consolidated group with the option to prepare a sustainability report for the consolidated group, or the parent entity alone. The applicants’ proposed approach reflects an election available under the Corporations Act, rather than a basis for relief.

We made an in-principle decision to refuse relief to an entity from the requirement to prepare a ‘standalone’ parent only sustainability report for the financial year ending 31 December 2025 (FY25). As permitted under s292A(2), the entity intended to lodge a ‘standalone’ parent-only rather than a consolidated sustainability report in FY25.

The entity is the parent company of an Australian group that lodges consolidated financial reports under Ch 2M. It also had one subsidiary that is a Ch 2M reporting entity and is not required to prepare sustainability reports until the financial year ending 31 December 2026 (FY26).

The entity argued that because it would be the only entity required to report in FY25, and its subsidiary would not be required to lodge sustainability reports until FY26, the administrative burden of preparing a standalone parent-only sustainability report justified relief.

We were not satisfied that compliance with the relevant sustainability requirements would impose unreasonable burdens because:

• the entity could have avoided the administrative costs and complexity of a ‘standalone’ parent sustainability report by preparing a consolidated sustainability report for the group in FY25
• the burdens arise solely from the entity’s decision to defer consolidation for a year.

We made an in-principle decision to refuse relief to three entities from the requirement to prepare sustainability reports for the financial year ended 31 December 2025. The entities are large proprietary companies and lodge individual Ch 2M financial reports. Relief was sought on the basis that their parent, an Australian partnership, prepare a consolidated sustainability report for the Australian corporate group.

The partnership comprises three Australian incorporated entities and three foreign incorporated entities with equal interests, and as such, control is not vested in any single corporate partner.

The parent prepares financial reports under a partnership agreement, and there is no legal requirement for partnerships to prepare and lodge general-purpose financial reports or sustainability reports with ASIC.

We were not satisfied that compliance would impose unreasonable burdens because:

• allowing the partnership parent to prepare a consolidated sustainability report for the Australian corporate group would be inconsistent with the connected information requirements in AASB S2 because it would not correspond with each of the individual entities’ financial reports and the parent does not prepare Ch 2M financial reports
• The partnership is not a legal entity and cannot act as a parent for the purposes of consolidation under the Australian Accounting Standards.

We made an in-principle decision to refuse relief to five separate applicants from the requirement to prepare a sustainability report for the financial year ended 31 December 2025. The applicants are foreign-owned large proprietary companies that are required to prepare and lodge financial reports under Ch 2M.

They sought relief on the basis that they lodge their foreign parent-level sustainability reports in compliance with the Task Force for Climate-related Financial Disclosures (TCFD) recommendations.

Generally, the applicants submitted that the resources, cost and effort required for Australian-level reporting are out of proportion to the value to the primary users of the information in the sustainability report.

The applicants argued that users would be more interested in global consolidated sustainability reports than Australian-level sustainability reports, as climate-related risks, opportunities, strategies and targets are managed at the global-level.

We were not satisfied that compliance with the relevant sustainability requirements would impose unreasonable burdens because:

• relief would reduce the consistency and comparability of climate-related financial disclosures because the TCFD recommendations are not equivalent to AASB S2 Climate-related Disclosures
• relief is inconsistent with the connected information requirements in AASB S2 Climate-related Disclosures because users of the Australian subsidiaries’ financial reports will not be able to understand connections between the subsidiaries’ financial reports and disclosures provided by the foreign parent-level sustainability report
• the ongoing compliance costs of preparing and lodging sustainability reports at the Australian subsidiary level are considered costs ordinarily incurred in complying with the legislation and doing business using a corporate structure in Australia, and

the fact that the reporting entity is privately owned or has limited known external users does not mean reporting is inappropriate in the circumstances.

We made an in-principle decision to refuse relief from the requirement to prepare sustainability reports for four entities within an Australian corporate group for the financial year ended 31 December 2025. Each of the four entities is a large proprietary company that currently lodges individual Ch 2M financial reports and meets the sustainability reporting requirements in its own right. Relief was sought on the basis that one of the four entities will prepare a sustainability report that includes the other three entities. The applicants submit that emissions within their value chain are better represented through a combined sustainability report at this proposed level.

However, none of these entities control the other three entities. Relief was required because these entities do not (and do not propose to) prepare consolidated financial reports under AASB 10 Consolidated Financial Statements.

We were not satisfied that compliance with the relevant sustainability requirements would impose unreasonable burdens because:

• allowing the companies to prepare a consolidated sustainability report for a group of entities that does not prepare corresponding consolidated financial reports is inconsistent with the connected information requirements in AASB S2 Climate-related Disclosures, and
• the companies’ proposal to artificially consolidate without control does not meet the requirements for preparing consolidated financial reports under AASB 10 and relief would be inconsistent with s292A(2).

We granted relief to three wholly owned entities of a registered superannuation entity (RSE) so that they do not have to prepare a sustainability report for the first financial year in which they would otherwise be required to do so.

The three wholly owned entities are unlisted companies that meet the threshold for sustainability reporting as part of Group 1.

The wholly owned entities have no material external operations and primarily provide internal support services to entities within the RSE group.

The RSE satisfies the threshold for sustainability reporting as part of Group 2 and is not required to prepare a sustainability report until the second financial year in which the wholly owned entities are required to do so.

Under the accounting standards, the RSE is required to prepare financial statements on a consolidated basis, which includes the wholly owned entities. The wholly owned entities do not require relief in subsequent reporting periods because the RSE intends to elect to prepare a consolidated sustainability report for the consolidated entity under s292A(2) from the RSE’s first reporting period.

We granted relief because we were satisfied the costs of preparing standalone audited sustainability reports for just one financial year would impose an unreasonable burden on the wholly owned entities, where:

• the three wholly owned entities primarily perform internal support functions and services to the RSE group
• cumulative greenhouse gas emissions of the three wholly owned entities represent an estimated less than 1% of the group’s absolute greenhouse gas emissions, and
• the climate-related financial disclosures of the three wholly owned entities would only be available for one reporting period if relief were refused.