If you operate your business as a sole trader or through a partnership or trust, the sustainability reporting requirements will not directly apply to you.

If you operate your business using a company structure, these reporting requirements will not directly apply to you until 2028 and, even then, only if the company satisfies at least two of the following criteria:

• For the financial year ending on 30 June 2028, the company has earned revenue of more than $50 million
• As of 30 June 2028, the company has assets of more than $25 million, and/or
• As of 30 June 2028, the company has more than 100 employees.

Larger businesses that exceed these thresholds should consider the information on ASIC’s sustainability reporting page, which explains how the sustainability reporting requirements apply to them.

Large businesses and financial institutions are required to consider and disclose material information about their climate-related financial risks and opportunities in their ‘value chain’.

If you have a customer or supplier that is a large business or financial institution, it is possible they may ask you for some information to assist them in meeting their reporting obligations.

For example, your customer or supplier may be trying to calculate their value chain greenhouse gas emissions. In many cases, it is expected that large businesses and financial institutions will use estimates and industry averages to meet this requirement, rather than sourcing the data directly from small-to-medium sized businesses.

However, if you are asked to provide data to a customer or supplier, and it is proving difficult for you, you may wish to speak directly to them about the specific issue. The reporting requirements applying to large businesses and financial institutions assume that some information will be too hard or costly to obtain and make some allowances for these types of situations. For example, larger businesses are permitted to use estimates and industry averages rather than directly sourcing the information from their value chain.

Mandatory sustainability reporting increases transparency. Reports prepared by large businesses and financial institutions will be available to the public via ASIC’s register.

Your business may be able to use these reports to better understand the approach your larger customers, suppliers and competitors are taking to climate change over the short, medium and long term.

You may find this information valuable. For example, you may be able to better understand:

• how your insurance company is positioned to respond to extreme weather events over the short, medium and long term and how this may impact your future insurance arrangements
• how and where large businesses plan to spend capital on climate change adaptation and resilience measures, which may create opportunities to source new business in certain sectors such as building and construction
• the climate-related risks and resilience of an important customer, supplier or key piece of infrastructure your business relies on, enabling you to understand how your business may be impacted by an extreme weather event affecting your supply chain, which in turn may allow you to take steps to build a more resilient business
• the climate-related opportunities being pursued by large businesses and financial institutions, which may create opportunities for small business to generate new income streams through the development of complementary products and/or services, and
• any potential longer-term structural changes in the industry in which you operate, providing information to help you to ‘future-proof’ your business

The new reporting requirements are being phased in over time according to the size of the business:

Note: this table is designed to support small businesses to better understand the size thresholds. Large businesses, financial institutions, entities reporting under the National Greenhouse Energy Reporting Act and assets managers should refer to Regulatory Guide 280: Sustainability Reporting (RG 280) where the grouping and phasing of requirements are summarised in full.

It is important to remember that the new reporting requirements will not directly apply to small-to-medium sized businesses.

If your business is large enough to meet the threshold for mandatory climate-related financial reporting, you will already be preparing and lodging a financial report with ASIC. These reports are generally prepared by the company’s accountant or tax agent.

Your accountant, tax agent or other professional advisor may be able to provide you with some information on the likelihood of your business crossing into a group threshold in the future and, if so, what group that is and what it means for you and your business.

ASIC is responsible for administering the mandatory sustainability reporting requirements for large businesses and financial institutions. We have published a regulatory guide alongside a host of information on our website. This may assist small-to-medium sized business owners that wish to learn more about the new requirements.

Over the course of this year, we plan to develop a range of capability building materials for public release. Interested small-to-medium sized business owners and operators should keep an eye out for these materials which will be available free of charge.