meta_id 3192323

On May 29, 2024, the Australian Securities and Investments Commission (ASIC) published early observations from its review of mandatory climate reporting submissions filed by entities in the first wave of Australia's climate disclosure regime. ASIC reviewed a sample of sustainability reports from listed entities with December 31 year-ends and will publish a comprehensive report with detailed findings in October 2024. ASIC identified six key areas requiring attention from preparers of climate-related financial disclosures. First, entities must clearly disclose judgements applied in preparing climate statements, as required by the Australian Accounting Standards Board (AASB) standard S2, to help readers understand the certainty attached to measurements. Second, entities must ensure voluntary or additional climate information does not obscure mandatory climate-related financial information; ASIC recommends using tables or index markers to distinguish statutory from supplementary content. Third, cross-references to other reports must meet specific standards—they must be available on the same terms and at the same time, and reference particular report sections rather than whole documents. Fourth, disclaimers must not conflict with the statutory framework or reporting objectives. Fifth, entities should consistently reference past events, current conditions, and forecasts when disclosing climate risks. Sixth, entities using climate-related targets should clarify whether targets are legally or regulatory required. ASIC emphasises this represents a generational change in reporting requirements and that the baseline established by first-wave reporters should not become a permanent benchmark. ASIC continues providing capacity-building resources, including regulatory guidance (Regulatory Guide 280), interactive modules, and webinars throughout June 2024. The regulator is adopting a pragmatic and proportionate supervisory approach during the three-year phase-in period with modified liability provisions. The government has proposed streamlining climate disclosures to reduce regulatory burden, and ASIC will participate in the consultation process while maintaining core sustainability requirements.

On May 29, 2024, the Australian Securities and Investments Commission (ASIC) published early observations from its review of mandatory climate reporting submissions filed by entities in the first wave of Australia's climate disclosure regime. ASIC reviewed a sample of sustainability reports from listed entities with December 31 year-ends and will publish a comprehensive report with detailed findings in October 2024. ASIC identified six key areas requiring attention from preparers of climate-related financial disclosures. First, entities must clearly disclose judgements applied in preparing climate statements, as required by the Australian Accounting Standards Board (AASB) standard S2, to help readers understand the certainty attached to measurements. Second, entities must ensure voluntary or additional climate information does not obscure mandatory climate-related financial information; ASIC recommends using tables or index markers to distinguish statutory from supplementary content. Third, cross-references to other reports must meet specific standards—they must be available on the same terms and at the same time, and reference particular report sections rather than whole documents. Fourth, disclaimers must not conflict with the statutory framework or reporting objectives. Fifth, entities should consistently reference past events, current conditions, and forecasts when disclosing climate risks. Sixth, entities using climate-related targets should clarify whether targets are legally or regulatory required. ASIC emphasises this represents a generational change in reporting requirements and that the baseline established by first-wave reporters should not become a permanent benchmark. ASIC continues providing capacity-building resources, including regulatory guidance (Regulatory Guide 280), interactive modules, and webinars throughout June 2024. The regulator is adopting a pragmatic and proportionate supervisory approach during the three-year phase-in period with modified liability provisions. The government has proposed streamlining climate disclosures to reduce regulatory burden, and ASIC will participate in the consultation process while maintaining core sustainability requirements.