Australia Issues Early Guidance on ISSB Sustainability Reporting

Australia’s corporate regulator has issued early observations to support companies preparing for mandatory sustainability reporting under the country’s new climate disclosure framework aligned with International Sustainability Standards Board (ISSB) principles. The update is intended to help businesses improve reporting quality as the first reporting cycle moves forward.

The guidance was released by the Australian Securities and Investments Commission (ASIC) following an initial review of sustainability reports submitted under Australia’s new reporting requirements. As of May 6, 2026, ASIC had received 259 sustainability reports, with most submissions coming from sectors including mining, manufacturing, financial services, oil and gas, and energy.

Australia’s sustainability disclosure framework is being implemented in phases and is based primarily on AASB S2 Climate-related Disclosures, which draws from ISSB standards. Group 1 entities became subject to reporting requirements for financial years beginning on or after January 1, 2025, marking the first year of mandatory reporting under the new system.

ASIC said its review will continue through 2026 and may include engagement with reporting entities on disclosure quality and implementation challenges. Final observations are expected later this year and are intended to strengthen consistency, transparency and confidence in sustainability-related financial reporting across Australia’s capital markets.

ASIC's early-observations approach after 259 first-cycle sustainability reports (mining, manufacturing, financial services, oil-and-gas, energy as leading sectors) reflects supportive-supervision philosophy rather than pure-enforcement approach. First-cycle reporting under new frameworks typically requires learning-and-improvement pathway; supervisory guidance during transition supports better practical outcomes than immediate enforcement.

The AASB S2 climate-standard focus combined with ISSB alignment provides the international-comparability architecture that Australian corporate disclosures require. Cross-border comparability matters for global-capital allocation; jurisdictional-standards that align with ISSB reduce dual-reporting burden while preserving Australian-context appropriateness.

For Group 1 and adjacent corporates, financial institutions with Australian portfolio exposure and their compliance advisors, Cognitud's ESG strategy and transformation, sustainability due diligence and market intelligence teams help clients evaluate exposure under AASB S2 framework, structure sustainability-reporting infrastructure aligned with ISSB principles, and prepare disclosures aligned with ASIC guidance, ISSB and jurisdictional climate-disclosure frameworks.