2025 marked major progress in sustainability reporting in Australia, including the launch of the Australian Sustainable Finance Taxonomy, new greenwashing enforcement, and amendments to AASB S2 and AUASB assurance standards.
Regulatory and legislative changes accelerated, with ASIC guidance, Treasury consultations, and the first mandatory climate-related disclosures for Group 1 entities shaping the reporting landscape.
Looking ahead to 2026, expect the first Group 1 sustainability reports from February – April, ASIC’s observations mid-year, and continued support from AASB and AUASB through guidance and education.
It has been a big year for sustainability reporting and assurance. While unsurprisingly there was significant focus on the first period of mandatory climate-related disclosures, 2025 also brought a range of notable sustainability developments in Australia.
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These included launching the Sustainable Finance Taxonomy, new enforcement against greenwashing, and a number of amendments to both AASB S2 and the Auditing and Assurance Standards Board’s (AUASB) new sustainability assurance standards.
Internationally, nature & biodiversity risks also continued to grow in prominence, resulting in the International Sustainability Standards Board’s (ISSB) stated intention to release a new nature-related standard by October 2026. As this year draws to a close, we reflect on the timeline of key reforms and consultations we have seen over the months.
1 January marked the start of the first mandatory reporting period for Group 1 entities with 31 December financial year end.
The AUASB issued ASSA 5010 and ASSA 5000, completing the necessary assurance standards dictating the phasing and standards for assurance of sustainability reports.
The Government exposed draft legislation for an amendment to the Corporations Act to extend the modified director liability provisions to voluntary sustainability reports.
In Europe, the introduction of the EU Omnibus Simplification Package created significant business uncertainty and political discussion as to the future of sustainability reporting in the EU.
Active Super was fined $10.5M penalty in a Federal Court ruling for greenwashing claims made in relation to its investment screening.
The AUASB proposed amendments to ASSA 5000 to address practical matters for the implementation of new independence standards for sustainability assurance.
Australia’s Federal election resulted in a landslide victory for the Labour Party, and as a result, increased business certainty over Government policy in relation to climate change and the energy transition.
The AASB launched the AASB S2 Implementation Advisory Panel.
The IFRS Foundation released snapshots of the 33 jurisdictions globally that have already, or were in the process of considering adopting ISSB aligned sustainability reporting standards.
The AUASB contemplated further amendments to ASSA 5010 and ASSA 5000.
The ISSB published an exposure draft amending the SASB standards for 9 specific industry and associated consequential amendments to the Industry-based Guidance on Implementing IFRS S2.
ASIC released its first Reporting and Audit Update, including useful guidance on the regulator’s observations from voluntary climate-related financial disclosures and information about its approach to sustainability reporting relief.
The Government introduced the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 into Parliament to extend the modified director liability provisions to voluntary sustainability reports.
The AUASB opened consultation on amendments to ASSA 5010, reflecting clarifications about assurance in relation to the Directors’ report and specifying phasing of assurance for voluntary reports.
The AUASB also opened consultation on amendments to ASSA 5000 to incorporate illustrative sustainability auditor reports.
DCCEEW opened consultations on climate-related scenario analysis guidance and greenhouse gas emissions methodology for the Agricultural sector.
ASIC issued the Reporting and audit update – Issue 2, with additional FAQ about sustainability assurance, the process of lodging sustainability reports, and sustainability reporting relief applications.
The UN Climate Change Conference of Parties (COP30) was held in Belém, Brazil. Australia withdrew its bid to be the host, instead agreeing to take a negotiating role as President of Negotiations.
The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 received Royal Assent, effective 5 December 2025.
The AASB is anticipated to issue the proposed amendment to AASB S2, effective 1 January 2027, with early adoption permitted.
What to expect in 2026
In the coming year, we are expecting to see the first round of Group 1 reports being released from February to April 2026. Many of these reports will be for private unlisted entities.
ASIC is expected to release observations on the first round of reports in May to June 2026, ahead of the second round of Group 1 reports from August to October. The AASB & AUASB are both also expected to continue supporting implementation with further educational materials.
We will continue bring you the latest new developments in sustainability reporting and assurance through our insights and webinars.
Article contributed to by Lily Fox – Senior Manager, Sustainable Finance
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