Who Must Report Under Australia’s Mandatory Climate Disclosure Laws?

Australia’s mandatory sustainability reporting laws create three distinct compliance groups, each with specific thresholds and implementation timelines. Understanding whether your organisation falls into Group 1, Group 2, or Group 3 is the critical first step in compliance planning. This guide explains the exact criteria, thresholds, and tests that determine reporting obligations under AASB S1 and AASB S2.

For comprehensive ESG strategy context, see our complete ESG guide for Australian businesses.

The Three Reporting Groups Overview

Australia’s mandatory sustainability reporting framework is structured in three groups, with each group having different compliance deadlines based on entity size and type:

• Group 1: Large reporting entities – First reporting obligation FY2025–26, first reports published 2026
• Group 2: Medium reporting entities – First reporting obligation FY2026–27, first reports published 2027
• Group 3: Smaller reporting entities – First reporting obligation FY2027–28, first reports published 2028

Group 1: Large Reporting Entities (FY2025–26)

Who Must Comply

Group 1 includes the following entities:

ASX-Listed Entities

All entities listed on the Australian Securities Exchange (ASX) must comply with AASB S1 and S2 from 1 January 2025 (first reports due 31 March 2026 for entities with 31 December financial year end). This includes:

• Companies listed on the ASX main board
• Stapled entities (listed entities with security staples)
• Entities listed on ASX sectors (metals & mining, energy, etc.)

Large Proprietary and Public Companies

Non-ASX-listed companies with consolidated assets or revenue meeting Group 1 thresholds must comply:

• Consolidated assets ≥ $250 million, OR
• Consolidated revenue ≥ $500 million

Either threshold being met triggers reporting obligation. Note that these are consolidated (group-wide) tests, not individual entity tests. A proprietary company with large consolidated assets/revenue may be required to report even if the individual company is proprietary.

Large Registered Schemes

Registered managed investment schemes with net assets of $250 million or more must comply. This includes:

• Unlisted managed funds with ≥$250m in assets under management
• Mortgage schemes
• Other registered schemes meeting the threshold

National Greenhouse and Energy Reporting (NGER) Reporters

Entities required to report under the National Greenhouse and Energy Reporting Act 2007 (Cth) because they emit ≥ 25,000 tCO₂e of greenhouse gas per year or consume ≥ 750 GJ of energy per year, or control a facility that meets these thresholds. NGER reporters must comply with AASB S1 and S2 regardless of financial size.

Consolidated Entity Test

The critical test is whether a consolidated entity (the parent company and all its subsidiaries and associates) meets the thresholds. Key points:

• A proprietary company with annual consolidated assets ≥ $250m or revenue ≥ $500m must comply even if the parent company itself does not meet the thresholds
• Tests are conducted on consolidated accounts prepared under Australian Accounting Standards
• Must consider financial year immediately preceding the reporting period
• Thresholds are measured at balance date of the most recent financial year completed before the commencement of the reporting period

Group 1 Reporting Deadline

Group 1 entities must prepare and lodge sustainability reports for financial years commencing on or after 1 January 2025. For entities with a 31 December financial year end, the first report is for FY2025 and must be lodged by 31 March 2026. Smaller financial year ends may have different deadlines.

Group 2: Medium Reporting Entities (FY2026–27)

Who Must Comply

Group 2 includes entities not in Group 1 but meeting the following thresholds:

Medium Proprietary and Public Companies

• Consolidated assets ≥ $100 million but < $250 million, OR
• Consolidated revenue ≥ $200 million but < $500 million

Again, either threshold triggers reporting obligation on a consolidated basis.

Medium Registered Schemes

Registered managed investment schemes with net assets ≥ $100 million but < $250 million.

Group 2 Reporting Deadline

Group 2 entities must prepare sustainability reports for financial years commencing on or after 1 January 2026. First reports are due by 31 March 2027 (for standard December financial year end).

Group 3: Smaller Reporting Entities (FY2027–28)

Who Must Comply

Group 3 includes entities not in Groups 1 or 2 but that are reporting entities under the Corporations Act with consolidated assets or revenue below Group 2 thresholds but above a minimum size threshold.

Smaller Proprietary and Public Companies

• Consolidated assets < $100 million OR consolidated revenue < $200 million
• BUT classified as reporting entities under the Corporations Act (generally, entities that have issued financial products or have public accountability)

Smaller Registered Schemes

Registered managed investment schemes with net assets < $100 million.

Group 3 Reporting Deadline

Group 3 entities must prepare sustainability reports for financial years commencing on or after 1 January 2027. First reports are due by 31 March 2028 (for standard December financial year end).

Special Cases and Exemptions

Consolidated Entity Exemptions

A consolidated entity can be exempted from reporting if:

• The consolidated entity is controlled by another reporting entity that prepares and lodges a consolidated sustainability report that includes the exempted entity’s information
• The parent entity publishes the consolidated report in accordance with AASB S1 and S2

This is relevant for wholly owned subsidiaries of larger groups. If a parent company (Group 1 entity) prepares a consolidated report, subsidiary companies can be exempted.

Transitional Relief

ASIC has provided transitional relief for certain entities in specific circumstances. Organisations should check ASIC Regulatory Guides and Class Order relief to determine if relief applies.

Temporary Reporting Obligation Deferrals

ASIC has power to defer or modify reporting obligations in exceptional circumstances. To date, no blanket deferrals have been granted, but individual deferrals may be available on request if demonstrable hardship exists.

NGER Reporting and Overlap

NGER Thresholds

The National Greenhouse and Energy Reporting Act 2007 (Cth) requires organisations to report if they control a facility that:

• Emits ≥ 25,000 tCO₂e per year, OR
• Consumes ≥ 750 GJ of energy per year

NGER reporting is mandatory and separate from AASB reporting. However, NGER reporters fall into Group 1 for AASB purposes regardless of financial thresholds.

NGER Reporting and AASB S2 Integration

NGER requires annual emissions reporting. For AASB S2 compliance, many organisations use NGER data as a foundation but may need to expand scope (particularly for Scope 2 and Scope 3), enhance governance disclosures, and develop climate scenario analysis not required by NGER alone.

Determining Your Group: Decision Tree

Step 1: Are you ASX-listed?

• Yes → Group 1 (comply FY2025–26)

Step 2: Are you an NGER reporter?

• Yes → Group 1 (comply FY2025–26)

Step 3: Check consolidated assets and revenue (most recent completed financial year):

• Assets ≥ $250m OR revenue ≥ $500m → Group 1 (comply FY2025–26)
• Assets ≥ $100m (but < $250m) OR revenue ≥ $200m (but < $500m) → Group 2 (comply FY2026–27)
• Assets < $100m AND revenue < $200m → Check if reporting entity under Corporations Act

Step 4: If below Group 2 thresholds, are you a reporting entity under the Corporations Act?

• Yes → Group 3 (comply FY2027–28)
• No → Not required to comply with AASB S1/S2 mandatory reporting (but may be subject to other disclosure requirements)

Frequently Asked Questions

Do we measure Group thresholds using consolidated or individual financial statements?

Always consolidated. The test applies to the consolidated entity (parent plus all subsidiaries and associates). A proprietary company with large consolidated assets may trigger reporting even if the individual company financial statements show smaller figures.

What if our consolidated assets or revenue fluctuate around the threshold?

The threshold is assessed based on the most recent completed financial year before the reporting period begins. A single year above the threshold triggers reporting in the next applicable group. Monitor your financials carefully in threshold years.

Our organisation is a private company not listed on ASX. Do we still need to comply?

If your consolidated assets ≥ $250m or consolidated revenue ≥ $500m, yes. Also if you are an NGER reporter. If below Group 2 thresholds but classified as a reporting entity under Corporations Act, you fall into Group 3.

We’re a small proprietary company. Could we still be required to report?

Yes, if: (1) you have a large parent company that reports on a consolidated basis that includes you; (2) you are an NGER reporter; or (3) you are a registered scheme or other reporting entity structure that falls into Group 3.

What counts towards the consolidated revenue or asset thresholds?

Use figures from consolidated financial statements prepared under Australian Accounting Standards. Total consolidated assets and revenue are measured at the reporting date of the most recent financial year completed before the reporting period begins.

If we fall into multiple groups, which do we follow?

You follow the earliest (strictest) group requirement. If ASX-listed, follow Group 1. If not ASX-listed but NGER reporter, follow Group 1. Otherwise, follow the group corresponding to your asset/revenue size.

Moving Forward: Assessment and Planning

Determining your compliance group is the critical first step. Once you know your group, you can plan implementation timelines, resource allocation, and governance structure changes needed to meet AASB S1 and S2 requirements. Organisations in all groups should begin planning now, as data collection, system implementation, and assurance arrangements all require lead time.

Not sure which group you fall into? Book a Free ESG Strategy Session to clarify your reporting obligations and begin planning compliance.