The Australian climate reporting mandates, introduced through the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (“Act”), were passed by Parliament on September 9, 2024, and received Royal Assent on September 17, 2024. This legislation requires climate-related financial disclosures in accordance with the Australian Sustainability Reporting Standards (“ASRS”) promulgated by the Australian Accounting Standards Board on September 20, 2025.  The first two AFRS are AASB S1 and AASB S2 (“Reporting Standards”), which prescribe reporting under the Climate Law.

While a close look at this new framework will be the subject of a future article, we wanted to provide key details now, so organizations can begin to plan for compliance.

Scope and Phasing

Reporting is mandated for companies that are required to file financial reports under Chapter 2M of the Corporations Act 2001 (“Corporations Act”), and fall within the following categories:

Courtesy E&Y 2025               

Report and Contents

Under this framework, reporting entities are required to prepare a Sustainability Report, which contains the Climate Statement for the fiscal year, notes thereto and a directors’ declaration about the statements and notes.  The Sustainability Report is filed at least annually, on the same schedule as the entity’s other financial reports.

The key components of the Climate Statement are:

• Governance – Processes and controls the entity uses to monitor and manage climate related risks
• Strategy – Approach the entity uses to monitor and manage climate related risks, including scenario analysis
• Risk management - Processes the entity uses to identify, assess and prioritize climate related risks and opportunities
• Metrics and Targets – Progress toward any targets the entity has set, or is required by law
• Financial effects – Impact of climate related risks and opportunities on the entity’s financial operations
• Emissions – Scope 1 and 2 emissions; Scope 3 from second reporting year, pursuant to GHG Protocol standards

The Reporting Standards closely follow the well-known ISSB / IFRS S1 and S2 requirements.

Liability Framework

Reports under the Act and Reporting Standards are subject to the current Australian legal framework in various areas, including directors’ duties, misleading representations and reporting compliance, as set forth in the Corporations Act, the Australian Securities and Investment Commission Act 2001 and the Competition and Consumer Act 2010. 

However, modified liability has been adopted in a few areas: (1) Liability for transition plans, scenario analysis and Scope 3 emissions is suspended for Sustainability Reports for periods between January 1, 2025 and December 31, 2027 and (2) Liability for forward looking statements is suspended for the first reporting year for Group 1 entities.

Assurance

Generally speaking, a company’s Sustainability Report will be subject to assurance requirements similar to those in the Corporations Act for financial reports.  To set applicable parameters for assurance, on January 28, 2025 the Australian Auditing and Assurance Standards Board (AUASB) approved the Australian Standard on Sustainability Assurance (ASSA) 5000 General Requirements and ASSA 5010 the timeline and phasing model. 

Summarized in the chart below, the assurance requirements are phased in with the goal of reaching a “reasonable assurance” end state by 2030:

Courtesy KPMG 2025               

The Road to Compliance

The first step in any compliance undertaking is understanding the scope and complexity of your business operations.  That will guide a determination of which reporting frameworks may apply, and those frameworks will prescribe what must be reported.  Aggregating the specific reporting requirements of all applicable jurisdictions will let your company design a program to collect the data that is necessary to generate the required reports. 

--Chip Horton, Tellus Markets Corp.

Need help planning your approach to ASRS compliance? Book a free consultation with our team here → Free consultation.  It’s never too early to understand your company’s regulatory posture and design a program that ensures compliance!

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