Climate reporting just became law in Australia: who reports, when, and what

Many business owners still think climate disclosure is voluntary, or years away. For the largest companies in Australia, it already started. The reports are no longer a nice extra. They are law.

The one question this answers

Does my entity have to lodge a sustainability report, and if so, from when?

The background in 60 seconds

Australia introduced mandatory climate reporting through changes to the Corporations Act. The detail sits in the Australian Sustainability Reporting Standards, and the climate standard is AASB S2. If you prepare a financial report under Chapter 2M and you are large enough, you now prepare a sustainability report too. The first group began reporting for periods starting on or after 1 January 2025.

The decision points

Work through these in order. Each one is a simple yes or no.

1. Do you prepare a financial report under Chapter 2M of the Corporations Act? If no, you are not caught.
2. Do you meet the size test for your group? You meet it when you satisfy at least two of the three thresholds.
3. Which group do you fall into? That decides your first reporting period.
4. Can you cover the four content areas: governance, strategy, risk management, and metrics and targets?

A worked example

Figure · AASB S2

Are you caught, and from when?

1 · The two of three test

500+employees

$500m+consolidated revenue

$1bn+consolidated gross assets

Meet any two → you must report.

2 · When you start

1. Group 1 1 Jan 2025 largest entities
2. Group 2 1 Jul 2026 lower thresholds
3. Group 3 1 Jul 2027 smaller again

Meet Harbour Freight, a private company that prepares a financial report. Here is the size test for the first and largest group.

Threshold (Group 1)	Harbour Freight	Met?
500 or more employees	600 employees	Yes
Consolidated revenue of 500 million dollars or more	700 million dollars	Yes
Consolidated gross assets of 1 billion dollars or more	400 million dollars	No

Harbour Freight meets two of the three thresholds. That is enough. It is caught, it sits in Group 1, and its first sustainability report covers the financial year that started on or after 1 January 2025.

The phasing runs like this:

• Group 1 reports for periods starting on or after 1 January 2025.
• Group 2 reports for periods starting on or after 1 July 2026.
• Group 3 reports for periods starting on or after 1 July 2027.

The plain fix

Three steps, today:

1. Confirm whether you prepare a Chapter 2M financial report.
2. Run the two of three size test on your latest consolidated numbers.
3. Find your group, write down your first reporting date, and start gathering governance and emissions information now, because the data takes longer than the writing.

Why this matters beyond compliance

Climate data is still data. Once you have to collect emissions, targets, and risk metrics every year, you want them clean, consistent, and ready to report. That is the same discipline good financial reporting already needs, and it is where clear standards turn into numbers you can trust.