Reporting Update 25RU-03
ASIC as sustainability reporting regulator
The mandatory sustainability reporting regime is new to the Australian reporting context. ASIC is the regulator responsible for this new mandatory sustainability reporting regime and has released Regulatory Guide 280 Sustainability reporting (RG 280).
Through RG280, ASIC seeks to provide guidance to reporting entities about complying with their sustainability reporting obligations by:
- Explaining when and how ASIC will exercise specific powers under legislation (primarily the Corporations Act)
- Explaining how ASIC interprets the law
- Describing the principles underlying ASIC’s approach
- Giving practical guidance
ASIC acknowledges that there will be a period of transition as entities continue to build their reporting capabilities. As such, proportionate and pragmatic approach will be taken to supervision and enforcement of the sustainability reporting requirement.
Regulatory Guide 280
The regulatory guide provides guidance for entities that are required to prepare a sustainability report under Chapter 2M of the Corporations Act 2001. The content of RG 280 covers the following topics:
- The preparation of the sustainability report
- Specific issues about the contents of the sustainability report
- Sustainability-related financial disclosures outside the sustainability report
- ASIC’s administration of the sustainability reporting requirements, including relief powers and surveillance program
To assist reporting entities and other stakeholders, ASIC will continue to expand its suite of publications related to sustainability reporting. Educational materials will also be developed to support capacity building for entities that have not undertaken sustainability reporting previously.
The timely release of the regulatory guide on sustainability reporting is welcome given we are in the first year of mandatory climate reporting. The guidance provides much needed clarity on ASIC’s interpretation of some of the more judgemental areas of the reporting framework that have been exercising the minds of entities and their advisors.
CP 380 Feedback response
In response to the feedback received during its consultation process on Consultation Paper 380 Sustainability reporting, ASIC has:
- Added sections on climate scenario analysis and disclosing Scope 3 greenhouse gas emissions
- Included more specific guidance for directors
- Included additional guidance on applying sustainability reporting thresholds
- Revised its draft position on labelling of sustainability-related information in sustainability reports
- Updated its guidance on disclosing sustainability reporting information outside the sustainability report.
Further details on this new regulatory guide are set out in our Reporting Update.
