ASIC's Sustainability Reporting Guidance

ASIC is reminding businesses to learn more about how they can be best prepared under Australia’s new mandatory sustainability reporting requirements, even if it may not apply to them directly. These new rules require large businesses and financial institutions to disclose information each year about their financial risks, opportunities, plans and strategies associated with climate change to their investors and lenders.

Many small businesses form part of the value chain of larger businesses, which means they may need to engage with climate reporting considerations over time, even if they do not have any direct climate reporting obligations. For example, a large business may need to report on their energy usage. To fulfill that reporting obligation, they may ask you for records of your business’s energy use, such as electricity bills, so they can create a full picture of their own energy use.

ASIC has also released Regulatory Guide 280 Sustainability reporting (RG 280), which includes guidance on determining who must prepare a sustainability report under the Corporations Act, the content required in the sustainability report, disclosing sustainability-related financial information outside the sustainability report (such as in disclosure documents and product disclosure statements), and ASIC’s administration of the sustainability reporting requirements (including our specific approach to considering relief and use of our new directions power).

Licensees should check to see if they are captured under the corporate size threshold, the emissions threshold, or the value of assets threshold. In addition, controls should be put in place to ensure the licensee performs an assessment annually, especially as the thresholds used to determine who is captured will reduce over the next two years.