Purpose of this guide

RG 280 provides ASIC’s guidance on sustainability reporting, particularly in applying ISSB Standards. It targets listed and unlisted entities preparing general-purpose financial reports under AASB standards. The aim is to enhance consistency, transparency, and reliability in sustainability-related financial disclosures.

Background

Following the release of IFRS S1 and S2 in June 2023 by the ISSB, the AASB has proposed incorporating these into Australia’s reporting framework. ASIC’s guidance supports this transition to improve investor information and mitigate greenwashing risks. Existing frameworks like TCFD and GRI have informed prior practices, but ISSB-based reporting will become the national baseline.

ASIC’s role in sustainability-related financial reporting

ASIC enforces relevant provisions under the Corporations Act 2001 and monitors sustainability disclosures for accuracy and compliance. Disclosures are subject to misleading or deceptive conduct provisions. ASIC also highlights the relevance of safe harbour protections for forward-looking statements, which apply only where statements are made on reasonable grounds.

Which entities are subject to the sustainability standards

Application of standards will occur in phases. Group 1 entities (revenue > $500m, >500 employees) begin from 1 July 2024, followed by Group 2 in 2026 and Group 3 in 2027. Certain exemptions apply, and transitional relief will reduce reporting burdens in early years.

Application of the ISSB sustainability standards in Australia

ASIC endorses the AASB’s approach to base local standards on IFRS S1 and S2. The standards apply a single materiality lens—focused on what is material to investors, not broader societal impacts. Preparers must ensure consistency with financial disclosures and clearly disclose assumptions and uncertainties, especially where estimates are involved.

Governance

Disclosures must explain governance structures overseeing sustainability risks, including board roles, subcommittees, and internal processes. Responsibilities should be clearly assigned, and inconsistencies with other disclosures (e.g. annual reports) avoided.

Strategy

Entities must describe strategies addressing sustainability risks and opportunities, including the use of climate scenario analysis. ASIC expects scenario analysis to be robust, though no specific methodology is mandated. Entities should also disclose transition plans, targets, and their alignment with broader climate goals.

Risk management

Processes for identifying and managing sustainability risks must be outlined, and their integration with enterprise risk management frameworks explained. Material climate risks must be disclosed, even if long term. Where processes differ from financial risk management, these differences must be clearly stated.

Metrics and targets

Required disclosures include Scope 1, 2, and—where material—Scope 3 GHG emissions. Despite data challenges, Scope 3 disclosures are expected over time, and preparers should start engaging suppliers and improving data systems. Metrics must be transparent, with assumptions and estimation methods clearly disclosed. Targets should be specific, time-bound, and aligned with strategic objectives.

Preparation of sustainability reports

ASIC expects sustainability disclosures to be as rigorous as financial reports, supported by internal controls and appropriate governance. Reasonable assurance will be phased in. Entities should prepare for this by strengthening systems and audit readiness.

Location of sustainability-related financial disclosures

Disclosures must appear in the annual report and be clearly identified. Cross-referencing is permitted if it does not affect accessibility or completeness. Separate sustainability reports are acceptable only if included within or alongside the annual report.

Assurance

Assurance will become mandatory, starting with climate disclosures. Reasonable assurance will be introduced over time, aligned with reporting group phases. ASIC encourages building internal and external assurance capabilities early.

Commencement date

Mandatory reporting begins 1 July 2024 for Group 1 entities, followed by Group 2 and 3 in 2026 and 2027. Transitional relief will ease the reporting burden initially, particularly around assurance.

Next steps

Entities should begin updating governance, risk systems, and data processes now. ASIC encourages early engagement with AASB and AUASB materials and alignment with the proposed standards to ensure compliance readiness.