Climate-related financial disclosure under Australian Sustainability Reporting Standards
The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 introduced mandatory climate-related financial disclosure for large Australian entities. The Australian Accounting Standards Board (AASB) issued ASRS 1 (General Requirements) and ASRS 2 (Climate-related Disclosures), aligned with ISSB standards. Reporting begins from 1 January 2025 for Group 1 entities. This guide sets out 10 core obligations.
Coverage
Large proprietary companies, registered schemes, and other reporting entities meeting size thresholds. Group 1 (from 1 Jan 2025): entities with 500+ employees or $500M+ consolidated revenue or $1B+ consolidated gross assets. Group 2 and Group 3 entities phase in over subsequent years with lower thresholds.
Legal basis
Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (Cth), ASRS 1 General Requirements for Disclosure of Sustainability-related Financial Information, ASRS 2 Climate-related Disclosures, Corporations Act 2001 (Cth) Chapter 2M. ASIC is the primary regulator.
The obligations
Disclose climate-related governance arrangements
Report the governance processes, controls, and procedures the entity uses to monitor, manage, and oversee climate-related risks and opportunities, including board and management roles.
Identify and disclose climate-related risks and opportunities
Identify climate-related risks (physical and transition) and opportunities that could reasonably be expected to affect the entity's prospects, and describe how they are managed.
Disclose climate strategy and business model impacts
Explain the current and anticipated effects of climate-related risks and opportunities on the entity's business model, value chain, strategy, and financial position.
Conduct and report climate scenario analysis
Use climate scenario analysis — including at least a 1.5°C scenario — to assess resilience of the entity's strategy. Disclose the scenarios used, assumptions, and key findings.
Disclose transition plans
If the entity has adopted a climate transition plan, disclose the plan's targets, actions, resource allocation, and progress. Include any reliance on carbon offsets.
Report scope 1 and scope 2 greenhouse gas emissions
Measure and disclose scope 1 and scope 2 greenhouse gas emissions in accordance with the GHG Protocol or NGER methodology, using appropriate consolidation approaches.
Report scope 3 greenhouse gas emissions
Measure and disclose material scope 3 (value chain) greenhouse gas emissions across relevant categories. A phased transition relief applies for initial reporting periods.
Disclose climate-related targets and metrics
Disclose quantitative and qualitative metrics used to assess climate-related risks and opportunities, including any targets set by the entity and progress against them.
Obtain assurance over climate disclosures
Engage an assurance practitioner to provide limited assurance over scope 1 and scope 2 emissions disclosures from the first reporting period, progressing to reasonable assurance.
Publish disclosures in the annual sustainability report
Include climate-related disclosures in the entity's sustainability report filed with ASIC alongside the annual financial report. The sustainability report forms part of the annual reporting suite.
What happens if you do not comply
Modified liability framework applies for the first three reporting years, shielding good-faith disclosures from private litigation (safe harbour). After the transition period, standard Corporations Act penalties apply — up to $1.11 million for individuals and $11.1 million for bodies corporate for misleading disclosure. ASIC retains enforcement powers throughout.
Reporting requirements
Annual sustainability report lodged with ASIC alongside the financial report. Group 1 entities report from financial years starting on or after 1 January 2025. Scope 3 emissions disclosure benefits from transitional relief in early periods.
What firms should do today
- Determine which entity group (1, 2, or 3) applies based on size thresholds
- Engage the board in climate governance and document oversight processes
- Establish emissions measurement systems for scope 1, 2, and 3
- Select and run climate scenarios aligned with ASRS 2 requirements
- Appoint an assurance provider for the first reporting period
- Integrate sustainability reporting timelines with annual report preparation
Compliance with Quillio
Quillio helps track ASRS disclosure deadlines, organise governance documentation, and cross-reference climate risk assessments against regulatory requirements. See /resources/security or start a free trial.
This guide is general information about mandatory climate disclosure obligations — not legal, accounting, or environmental advice. Engage specialist sustainability reporting advisers for your entity's specific requirements.
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