Regulatory Guide 280: Sustainability Reporting (RG 280) provides guidance for entities required to produce sustainability reports, including climate-related financial data, under Chapter 2M of the Corporations Act 2001. It takes account of market feedback on a Draft Regulatory Guide 000: Sustainability Reporting (Draft RG), which was released in November 2024 – read more in our update Mandatory Climate Reporting: ASIC's draft regulatory guide, includes clues.

Directors, along with reporting and sustainability teams, will find RG 280 a useful overview of the main elements of the new climate reporting framework.

The publication of RG 280 is a critical piece that supports the implementation of these sustainability reporting requirements passed by the Australian Parliament. We will continue to expand our broader suite of publications related to sustainability reporting over time as market practices evolve.

ASIC Commissioner, Kate O’Rourke

RG280 covers:

1. Preparing the Sustainability Report
2. Content Required in the Sustainability Report
3. Sustainability-related Financial Disclosures Outside the Sustainability Report
4. ASIC’s Administration of the Sustainability Reporting Requirements

ASIC has largely resisted calls for more fulsome guidance in relation to some of the trickier emerging practical challenges of climate reporting in Australia. Because ASIC's regulatory guidance is intended to be general in nature and ASIC expects "reporting practices will evolve over time", RG 280 does not provide much by way of practical guidance on the preparation of, and content required in, a sustainability report and does not include templates, worked examples, or detailed application guidance. ASIC rejected requests for such things because specific guidance for the Australian market has the potential to lead to fragmentation or misalignment with what are effectively global standards.

Notwithstanding those limitations, there are some useful clarifications in RG 280. For example:

• Relevant to the funds management sector, ASIC has clarified that:

the value of assets is not the only test applicable to superannuation funds, registered schemes, and retail CCIVs and that the corporate size and emissions thresholds may also apply to require sustainability reporting; and

entities other than those, such as investor directed portfolio service providers, RSE licensees, responsible entities of unregistered schemes or trustees or unregistered managed investment schemes are not covered by the value of assets test.

• No legal action (except for criminal actions or actions by ASIC) can be taken regarding "protected statements" made in a sustainability report for up to three years after commencement of the new regime on 1 January 2025. ASIC has clarified that it lacks the authority to broaden that modified liability settings under section 1707D to deal with the surprising position that something can be a "protected statement" in a sustainability report but exactly the same statement in an investor presentation is not. However, RG 280 now usefully confirms that something can be a "protected statement" in an operating and financial review (OFR), provided it is required under s299A of the Corporations Act. This is helpful, although the legal determination of whether a statement is required under Commonwealth law often involves complex, qualitative judgement.

• ASIC has backed off from its original quite prescriptive approach to labelling and the strict separation of statutory sustainability reports from other information. Consistent with our earlier commentary, during the consultation on the draft regulatory guide, many submissions called for greater flexibility in labelling sustainability information to better meet user needs. In response, ASIC revised RG 280 to provide more flexibility for entities wishing to include broader sustainability information in their reports.

RG 280 has an abbreviated section providing guidance for directors of reporting entities. This emphasises that acting consistently with the duty of care and diligence requires directors to:

• understand the entity’s sustainability reporting obligations and the climate-related risks or opportunities that could reasonably be expected to affect the entity’s prospects;

ensure that the reporting entity has:

systems that identify, assess and monitor any material financial risks relating to climate (including any changes);

controls, policies and procedures to manage and prepare the sustainability report and keep sustainability records; and

• apply a critical lens to the proposed disclosures in the sustainability report.

RG 280 also includes general examples of what the above might involve. For example, applying a critical lens to proposed disclosure might require a director to question the appropriateness or completeness of methodologies, inputs and assumptions used to support disclosures.

MinterEllison would be pleased to assist with advice on the implications of RG 280 or in respect of sustainability reporting generally.