ASIC has today released a draft regulatory guide on the sustainability reporting regime for consultation with stakeholders.

From 1 January 2025, many large Australian businesses and financial institutions will need to prepare annual statutory sustainability reports containing climate-related financial disclosures.

The draft Regulatory Guide 000 Sustainability reporting (Draft RG 000) includes guidance on who must prepare a sustainability report, how the regime will interact with existing legal obligations and how ASIC will administer the sustainability reporting requirements. This includes specific guidance on ASIC’s approach to granting relief from the regime and use of its new directions power.

Draft RG 000 also addresses specific issues in relation to the contents of the sustainability report and sustainability-related financial disclosures outside the sustainability report.

ASIC Commissioner Kate O’Rourke said: ‘Our focus for this regulatory guide is to assist preparers of sustainability reports to comply with their obligations so that users are provided with high-quality, decision-useful, climate-related financial disclosures that comply with the law and the sustainability standards.’

ASIC’s Consultation Paper 380 Sustainability reporting (CP 380) seeks stakeholder feedback on the draft guide, whether any ASIC legislative instruments that grant relief in relation to financial reporting or audit requirements should be extended to sustainability reporting and any other areas where ASIC should support the introduction of the sustainability reporting regime.

‘We want industry to engage with our draft guidance and what we are proposing. Their feedback will help us to ensure that we can effectively support the implementation of the sustainability reporting regime,’ Ms O’Rourke said.

‘We recognise that there will be a period of transition whilst entities build their capability, as reflected in the phasing in of requirements and modified liability provisions.

‘During this transition period, we will take a proportionate and pragmatic approach to supervision and enforcement.’

ASIC is urging all reporting entities to prepare for the new climate disclosure regime. Feedback on CP 380 is due by 19 December 2024.