Summary
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Details
- Australia
- Large entities and their subsidiaries according to the following criteria:
- Group 1: Meet at least two of — consolidated revenue ≥ $500 million, consolidated gross assets ≥ $1 billion, workforce ≥ 500 employees — from 1 January 2025.
- Group 2: Meet at least two of — consolidated revenue ≥ $200 million, consolidated gross assets ≥ $500 million, workforce ≥ 250 employees — from 1 July 2026.
- Group 3: Meet at least two of — consolidated revenue ≥ $50 million, consolidated gross assets ≥ $25 million, workforce ≥ 100 employees — from 1 July 2027.
- Entities subject to reporting under the National Greenhouse and Energy Reporting (NGER) Scheme, as well as registrable superannuation entities (RSEs), registered schemes, and retail corporate collective investment vehicles (CCIVs), are also included in the reporting framework, with certain phase-in adjustments.
Deep dive
Background
Commonly called Australia’s climate‑related financial disclosure law, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 (the Bill as passed) inserts a new sustainability‑reporting regime into the Corporations Act 2001 (Schedule 4). It requires in‑scope entities to prepare an annual sustainability report that includes climate statements prepared in line with Australian Sustainability Reporting Standards (AASB S2), to lodge the report with the Australian Securities and Investments Commission (ASIC), which administers and enforces the regulation. The regime builds on and complements three major climate instruments: the NGER Scheme (facility‑level emissions reporting), the Safeguard Mechanism (caps and crediting for large emitters), and the Climate Change Act 2022 (national 2030/2050 targets). Together they link facility‑level data, economy‑wide targets and capital‑market transparency. According to a policy impact analysis by the Australian Treasury, at least 1800 Australian companies will be required to make annual climate-related disclosures under the regulation.
Reporting requirements
Sustainability reports must contain climate statements that comply with AASB S2 (aligned to the IFRS/ISSB baseline). That means disclosing governance, strategy, risk management, and metrics & targets, including gross Scope 1, Scope 2 and Scope 3 greenhouse‑gas emissions (with relief in the first year of AASB S2 for certain Scope 3 disclosures) and, where relevant, financed emissions (for asset management, banking and insurance). Scenario analysis and transition‑plan disclosures are also required under AASB S2.
Sustainability reports are to be lodged with ASIC and published on the reporting entity's website from the day of lodgment. To facilitate compliance, reporting entities might want to explore SaaS solutions like Greenbase’s Envago suite (Envago Carbon/Envago NGER) which is tailored to Australian reporting, including NGER data capture that supports AASB S2 disclosures.
Penalties for non-compliance
Noncompliance with certain provisions of the Treasury Laws Amendment Act 2024 carry strict-liability financial penalties and, in some cases, criminal sanctions. Specific failures include:
Records & retention: A breach of the record-keeping requirement is considered both a fault-based offense (with a maximum prison term of two years) and strict liability (with a maximum penalty of 60 penalty units).
Location of records. If records are kept outside Australia, keep sufficient written information domestically and notify ASIC of the place—breaches attract strict‑liability penalties (60 penalty units).
ASIC directions: ASIC can direct an entity to correct/explain/produce information in relation to sustainability reporting; non‑compliance is a strict‑liability offence (60 penalty units).
Lodgement failures. Failing to lodge annual reports (including sustainability reports) within deadlines is an offence under the Corporations Act. Companies have recently been prosecuted for late/non‑lodgment of financial reports, which ASIC has also identified as a focus area for enforcement during the 2025-25 financial year.
ASIC has stated that it will adopt a "proportionate and pragmatic" enforcement approach to the new climate-related disclosure regime and, following its review of the first sustainability reports, will issue further guidance to assist reporting entities.
Current status
The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 is in force. ASIC has confirmed that sustainability reporting in line with AASB S2 Climate-related disclosures will begin as scheduled for Group 1 entities with financial years starting on or after 1 January 2025. ASIC has moreover stated that it will adopt a "proportionate and pragmatic" enforcement approach to the new climate-related disclosure regime and, following its review of the first sustainability reports, will issue further guidance to assist reporting entities.
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