On 18 May 2026, the Australian Securities and Investments Commission (ASIC) shared its observations on the first sustainability reports prepared under Chapter 2M of the Corporations Act 2001 (Cth) (Corporations Act). ASIC is sharing these observations to help other reporting entities as they approach the 30 June 2026 reporting season. ASIC’s observations are based on some of the sustainability reports that Group 1 entities have filed for financial years commencing on or after 1 January 2025.
ASIC reports that it has seen an increase in the quantity and quality of climate-related financial information in the market compared to previous voluntary climate-related disclosures. However, it has also identified opportunities to strengthen the quality of reporting, and it encourages entities to consider the following when preparing reports:
- Disclaimers that conflict with the statutory framework and objectives of Chapter 2M sustainability reporting may confuse or mislead and are not permitted to be used.
- The ‘reasonable and supportable’ information available to entities to identify climate-related risks includes information about ‘past events, current conditions and forecast future conditions.’
- Reports should provide clear, effective and proximate disclosure of relevant judgements, assumptions and areas of measurement uncertainty.
- The disclosure of additional climate-related information must not obscure material climate-related financial information.
- When cross-referencing information outside the sustainability report, entities must ensure they meet disclosure requirements.
- When determining whether an entity has a ‘climate-related target’, entities are reminded that the definition of ‘climate-related targets’ in Australian Sustainability Reporting Standard (i.e. AASB S2) extends to targets that the entity is required to meet by law or regulation. This includes greenhouse gas emissions targets such as the Safeguard Mechanism.
Next steps
ASIC’s review of sustainability reports will continue over the coming months and as part of this it may engage with reporting entities about their disclosures. ASIC will publish its final observations from the reviews in the second half of 2026.