On 21 September 2026, the Australian Securities and Investments Commission (ASIC) released Report 839 (ASIC’s review of sustainability reports lodged for 31 December 2025 (REP 839)), together with an accompanying media release, setting out its observations from a review of 40 sustainability reports lodged by Group 1 entities under Australia’s new mandatory sustainability reporting regime.
The regime in context
Australia’s statutory sustainability reporting requirements commenced for financial years beginning on or after 1 January 2025, with the largest entities required to report first as “Group 1.” Group 2 entities follow for financial years beginning on or after 1 July 2026, and Group 3 from 1 July 2027. As at the date of the report, 312 sustainability reports had been lodged by the December 2025 cohort.
What ASIC found
ASIC Commissioner Kate O’Rourke said ASIC’s review of a sample of 40 sustainability reports detailed in REP 839 identified marked progress in disclosure reporting compared with the quality of disclosures previously made on a voluntary basis, observing that statutory reporting has driven not only greater transparency but also “more meaningful engagement by entities with climate-related risks and opportunities.” ASIC saw evidence of entities adapting or updating existing governance and risk management processes in response to the new requirements.
However, the regulator identified clear room for improvement in forward-looking disclosures, and those underpinned by assumptions or judgement — for example, in aspects of strategy and metrics and targets disclosures. To assist responsible entities, ASIC has outlined eight practical action items for reporting entities, building on its early observations published in May 2026.
Practical action items
The eight practical action items are:
- Explain how information in the sustainability report connects with relevant disclosures in the financial report — for example, linking cross-industry metrics and current and anticipated financial effects with related items in the financial statements.
- Carefully consider whether quantitative information can be disclosed about the current and anticipated financial effects of climate-related risks and opportunities, rather than relying solely on qualitative narrative — and, where qualitative information is provided, ensure users can understand the reasons.
- Consider past events, current conditions and forecast future conditions when identifying climate-related risks and opportunities, including how the entity may be affected directly or indirectly across its value chain.
- Provide clear, effective and proximate disclosure of relevant judgements, assumptions and areas of measurement uncertainty — including when identifying risks and opportunities and calculating cross-industry metrics.
- Meet the cross-referencing disclosure requirements — including ensuring that cross-referenced information is available on the same terms and at the same time as the sustainability report.
- Do not use disclaimers that conflict with the statutory framework and objectives of Chapter 2M of the Corporations Act 2001 (Cth), which may confuse or mislead users.
Next steps
ASIC signalled that in 2026–27 it will review a sample of sustainability reports lodged by Group 1 entities with 30 June 2026 year-ends and will continue engaging with large audit firms on assurance methodologies.
For reporting entities — particularly those in Group 2 preparing for their first mandatory reports — REP 839 is essential reading. ASIC’s eight action items provide a practical compliance roadmap, and the clear message is that the regulator expects continued improvement as entities gain experience. Boards and sustainability teams should be reviewing their forward-looking disclosures and the assumptions underpinning them well ahead of the next reporting cycle.