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Recapping ASIC’s Final Regulatory Guide on Sustainability Reporting

Published Date

The Australian Securities and Investments Commission (ASIC), the regulator responsible for overseeing sustainability reporting practice, issued its final regulatory guide on sustainability reporting on 31 March 2025.

ASIC’s final guidance is a practical tool for entities preparing to meet new mandatory climate reporting obligations. It provides valuable insight into how the regulator intends to interpret and enforce the framework, offering clarity on directors’ legal responsibilities, including how existing duties apply in the climate context. 

The guidance also provides examples of forward-looking climate information and clarifies how modified liability settings will and will not apply. ASIC stated that the guidance is intended to be general and broadly applicable to all reporting entities, and that it will take a proportionate and pragmatic approach to supervision and enforcement.

Key takeaways for directors 

  • Clarification of directors’ duties: ASIC has outlined expectations for directors in relation to sustainability reporting, highlighting the importance of governance frameworks. This includes implementing oversight mechanisms, developing internal processes to detect, evaluate, and monitor climate-related material financial risks and opportunities, and a critical review of disclosures.

  • Modified liability regime: Statements included in the legally required Operating and Financial Review (OFR) are protected under the modified liability regime. However, disclosures made outside the sustainability or auditor’s reports are only protected if they are exact copies. Any summaries, expansions, cross-references, or voluntary disclosures, such as those in investor presentations or responses to AGM questions, are not covered by this protection.

  • Expanded guidance on scenario analysis and Scope 3 emissions: In providing further guidance on scenario analysis, ASIC has clarified that entities must use at least two climate scenarios, one being a 1.5°C scenario and the second scenario of temperature rise above 2.5°C. It also provides practical guidance on estimating and measuring Scope 3 emissions, acknowledging the challenges entities face in reporting these emissions. 

     

Understanding the Australian sustainability reporting framework and how it applies to you can be challenging. Schneider Electric’s expert consultants, along with focused software and data solutions, can support you in compliance reporting and capturing opportunities that lead to a competitive advantage during the transition. Sign up to view our Australian Climate Reporting webinar and reach out to Jo Koh with any questions.

Contributor:

Jo Koh,  Sustainability Analyst, Schneider Electric