The Australian Government has fulfilled its promise to mandate sustainability reporting under the Corporations Act 2001. This landmark legislation will require certain organisations to make detailed disclosures about their climate-related risks and opportunities, starting with the largest emitters and corporations from 1 January this year.
For Group 2 and Group 3 entities, the time to act is now. Delaying preparation could leave organisations scrambling to meet complex compliance requirements, risking financial and reputational consequences.
By taking proactive steps today, businesses can ensure they are well-positioned to meet regulatory expectations, enhance investor confidence, and build long-term resilience.
What Are the New Standards?
The Australian Sustainability Reporting Standards (ASRS) are modelled after international frameworks such as the IFRS Sustainability Disclosure Standards and the Task Force on Climate-related Financial Disclosures (TCFD). The two key standards are:
AASB S2 Climate-Related Disclosures – Businesses must report on climate-related risks and opportunities, including governance, strategy, risk management, and key metrics such as Scope 1, 2, and 3 emissions.
AASB S1 General Sustainability Disclosures – A broader framework for general sustainability-related risks and opportunities, initially voluntary but expected to gain traction.
For many organisations, these disclosures will represent the first time they’ve been asked to quantify and communicate their impacts, risks, and opportunities.
Mandatory Climate Reporting: Who Needs to Report?
Australian entities required to prepare and lodge a financial report with the Australian Securities and Investments Commission (ASIC) under Chapter 2M of the Corporations Act 2001 must prepare a sustainability report if they meet at least two of the following three criteria:
Group 1 (2025): Large entities with $500M+ revenue, $1B+ assets, or 500+ employees.
Group 2 (2026): Medium-sized entities with $200M+ revenue, $500M+ assets, or 250+ employees.
Group 3 (2027): Smaller entities with $50M+ revenue, $25M+ assets, or 100+ employees.
If your business falls into the Group 2 category for example, you have just over a year to prepare. Waiting until the last minute could result in rushed data collection, compliance risks, and lost opportunities to refine internal processes.
What Needs to Be Reported?
Companies are required to prepare an annual sustainability report as part of their reporting obligations. This must include:
Material climate-related financial risks and opportunities.
A transition plan outlining how the company is adapting to climate risks and shifting toward a lower-carbon future.
Greenhouse gas emissions reporting, including Scope 1, 2, and 3 emissions.
Climate-related targets and progress tracking for emission reduction commitments.
Scenario analysis to assess financial resilience under different climate outcomes.
Governance and risk management processes to ensure effective oversight.
Assurance requirements will be phased in, starting with limited assurance and eventually requiring all climate-related disclosures to be subject to reasonable assurance.
Why Start Now?
For Group 2 and Group 3 entities, getting ahead of mandatory climate reporting is critical. Here’s why:
Avoid Compliance Risks – Early preparation ensures alignment with regulatory requirements and reduces the risk of penalties or reputational damage.
Improve Data Quality – Sustainability reporting requires accurate data across operations and supply chains. Starting now allows time to refine data collection processes and address any gaps.
Enhance Investor and Stakeholder Trust – Transparent, credible disclosures attract investment and strengthen relationships with customers, employees, and partners.
Competitive Advantage – Businesses that proactively engage with climate reporting will be seen as industry leaders, positioning themselves for future opportunities in a carbon-conscious economy.
Reduce Costly Last-Minute Scrambles – Developing robust reporting frameworks takes time. Rushing the process can lead to errors, increased costs, and inefficiencies.
Strengthen Internal Capabilities – Engaging teams in climate risk assessment and ESG strategy now will foster long-term business resilience.
How Can Perspektiv Help?
At Perspektiv, we specialise in guiding organisations through regulatory compliance and ESG disclosure with confidence. Our expertise ensures you not only meet requirements but also unlock long-term value from sustainability initiatives.
Here’s how we support your transition:
Readiness Assessments – We conduct in-depth evaluations to identify gaps in your data, governance, risk management, and reporting systems.
Tailored Roadmaps – We develop step-by-step plans to align your operations with evolving reporting standards.
Risk and Opportunity Mapping – We assess climate-related risks and opportunities, helping you mitigate threats and capitalise on sustainable growth.
Capacity Building – Our expert-led workshops equip teams with the knowledge and skills needed to navigate regulatory frameworks.
Data and Target-Setting – We calculate emissions inventory and establish science-based net zero pathways.
Contact Perspektiv
Ready to start your journey toward compliance with confidence? Get in touch with Perspektiv’s experts today to create a sustainability strategy that works for your business—and for the planet.
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