312 entities have lodged. ASIC has reviewed 40. Almost all named material climate risks, but more than a third described the financial effects in words only. Here is what the first wave of mandatory climate reports tells us, and what to address before your next report.
Mandatory climate reporting under AASB S2 started for the largest Australian entities with financial years beginning on or after 1 January 2025. The first reports, for 31 December 2025 year-ends, have now been lodged, assured and reviewed by the regulator. On 21 September 2026 ASIC released Report 839, its review of 40 of those reports.
The verdict is positive. ASIC found a marked improvement in the quality, quantity and consistency of climate information compared with the voluntary era. The detail is where the lessons are, and they apply to every entity still preparing its first report.
The regime phases in over three years. Each group's first reporting period starts on or after the date below, and an entity is in a group if it meets two of the three size tests.
Group 2 is now inside its first reporting year. Those reports land for 30 June 2027 year-ends.
ASIC also called out a specific disconnect. Some entities had recorded weather-related impacts in their financial statements or ASX announcements, but did not identify the same physical risk in their sustainability report. ASIC reads both documents side by side. So will your assurer.
Report 839 closes with eight action items. They work well as a pre-lodgement checklist.
Assurance phases in under ASSA 5010. Year one requires limited assurance over Scope 1 and 2 emissions, governance and parts of strategy. The scope widens each year, building to reasonable assurance over the full report for periods from 1 July 2030. In PwC's review of 22 first-wave reports, every one received an unqualified limited assurance opinion.
Liability protection is also temporary. For the first three years, for financial years starting before 1 January 2028, only ASIC can take action over statements about Scope 3 emissions, scenario analysis and transition plans, and directors declare whether the entity has taken reasonable steps to comply. Misleading conduct provisions still apply to everything else.
The enforcement record shows what ASIC expects behind a climate claim. It has secured greenwashing penalties against Vanguard ($12.9 million), Mercer ($11.3 million), Active Super ($10.5 million) and, in August 2026, Fiducian ($7.3 million), the last for failing to monitor holdings against its ESG claims. In contrast, the Federal Court dismissed the greenwashing claims in ACCR v Santos (February 2026, under appeal) because Santos could show reasonable grounds for its targets. The defence is evidence and controls, not disclaimers.
Proposed, not yet law. The 2026-27 Budget proposed raising the large proprietary company thresholds to $100 million revenue and $50 million gross assets, which would take around 1,500 private companies out of Group 3. Treasury has also consulted on assurance (including deferring reasonable assurance to 2035), proportionality guidance and limits on supplier data requests. That consultation closed on 2 October 2026. Government has also announced that Climate Active certification is ending, with a proposed end date of 30 June 2027; consultation on the transition closed on 18 September 2026.
Already final. AASB S2025-1 gives relief on financed emissions and industry classification from 1 January 2027, with early adoption allowed. Government has released voluntary transition planning guidance.
Unchanged. Group 2 and Group 3 start dates have not moved, and ASIC will keep administering the regime as it stands until any law changes.
The first reports are a baseline, not a benchmark. ASIC has said it expects improvement as entities gain experience, and its next review covers 30 June 2026 year-ends. The gaps it has named are the ones it will look for next.
We work with organisations on climate risk and materiality assessments, scenario analysis, GHG inventories and AASB S2 disclosure preparation, from first-year readiness through to assurance.
Start a conversationSources: ASIC Report 839 and media release 26-222MR (21 September 2026); ASIC early observations on sustainability reporting (18 May 2026); PwC, AASB S2 unpacked (March 2026); ASIC media release 25-042MR; Federal Court, ACCR v Santos (February 2026); Treasury, Improving the efficiency of climate-related financial disclosures (2026); AASB S2025-1. Information current at 7 October 2026. This article is general information, not advice.