Guide 3 of 5 · Sustainability reports
Who must prepare a sustainability report: the three groups and their start dates
Under s 292A of the Corporations Act 2001, an entity must prepare a sustainability report for a financial year only if it must prepare a financial report for that year under Chapter 2M and it meets the size test, the NGER test or the asset test in that section. Until 1 July 2027 the duty is phased in by groups: financial years starting from 1 January 2025 for the largest entities and some NGER reporters, from 1 July 2026 for a second group, and on or after 1 July 2027 for every entity s 292A reaches.
General information only, not legal or accounting advice. The official place to check is ASIC, which administers the requirements and sets out its approach in Regulatory Guide 280.
The gate: a financial report under Chapter 2M
Every test sits behind one condition. Section 292A(1) reads:
“Subject to subsection (2), an entity must prepare a sustainability report for a financial year if: (a) the entity must prepare a financial report for the financial year under this Chapter; and (b) subsection (3), (5) or (6) of this section applies to the entity for the financial year.”
“Note: For financial years commencing before 1 July 2027, only certain entities are required to prepare a sustainability report: see Part 10.77.”
Corporations Act 2001, s 292A(1), compilation of 19 September 2026
So an entity with no Chapter 2M financial report is not reached, however large. ASIC says the requirements will not directly apply to a business run by a sole trader or through a partnership, and that a business large enough to meet the thresholds will already be preparing and lodging a financial report with ASIC. A parent required to prepare consolidated financial statements may elect to prepare one report for the consolidated entity, and is then the only entity in it that must (s 292A(2)).
The three tests in s 292A
Size: at least 2 of 3 (s 292A(3))
The figures are those prescribed for the proprietary company thresholds in s 45A, by reg 1.0.02B of the Corporations Regulations 2001 (compilation of 1 September 2026). An entity meets the test if at least 2 of these are true, counting the entities it controls:
- consolidated revenue for the financial year of $50 million or more;
- consolidated gross assets at the end of the year of $25 million or more;
- 100 or more employees at the end of the year, counting part-time employees as a fraction of a full-time equivalent (s 292A(4)).
NGER (s 292A(5))
The entity is “a registered corporation under the National Greenhouse and Energy Reporting Act 2007 at the end of the financial year”, or is required to apply to be registered under s 12(1) of that Act for the year. Size does not matter here. The NGER side is in the guide to NGER reporting.
Assets held for others (s 292A(6))
The entity is a registered scheme, a registrable superannuation entity or a retail CCIV, and the value of its assets at the end of the year, with the entities it controls, is $5 billion or more, unless the regulations prescribe another amount.
The phasing, group by group
Part 10.77 sets the start date and two transitional periods. The start date is 1 January 2025, because the section commenced on or before 2 December 2024; the Register’s endnotes record that items 2 to 127 and 132 to 146 of Schedule 4 to the amending Act commenced on 18 September 2024. The first transitional period runs from the start date to 30 June 2026, and the second from 1 July 2026 to 30 June 2027 (s 1707). Section 1707B then says which entities s 292A reaches in each:
| Group | Financial year starts | Entities reached |
|---|---|---|
| Group 1 | 1 January 2025 to 30 June 2026 | An entity, other than a registered scheme, registrable superannuation entity or retail CCIV, meeting at least 2 of: consolidated revenue of $500 million or more; consolidated gross assets of $1 billion or more; 500 or more employees (s 1707B(2)). Or an NGER registered corporation, or one required to apply under s 12(1), whose group meets the s 13(1)(a) threshold of 50 kilotonnes or more, again other than a registered scheme, registrable superannuation entity or retail CCIV (s 1707B(4)). |
| Group 2 | 1 July 2026 to 30 June 2027 | An entity meeting at least 2 of: consolidated revenue of $200 million or more; consolidated gross assets of $500 million or more; 250 or more employees (s 296B(2)). Or any NGER registered corporation, or one required to apply under s 12(1) (s 296B(4)). Or a registered scheme, registrable superannuation entity or retail CCIV with assets of $5 billion or more (s 296B(5)). |
| Group 3 | 1 July 2027 or later | Every entity s 292A reaches: the size, NGER and asset tests above (s 1707B(1)(c)). |
Groups 1 and 2 must still pass the Chapter 2M gate. The groups turn on when the financial year starts, not when it ends: for a company whose year runs from 1 July to 30 June, the first year starting on or after 1 July 2027 is the one that ends on 30 June 2028.
ASIC’s Regulatory Guide 280, issued in March 2025, summarises the same three groups in its Table 2, and ASIC says it administers the mandatory sustainability reporting requirements.
When there are no material climate risks
An entity with no material financial risks or opportunities relating to climate may give, as its climate statements, a statement of that fact and an explanation, but only if none of the tests in s 296B(2), (4) and (5), the group 2 tests, applies to it. Section 296B(1) reads:
“Despite subsection 296A(2), if, for a financial year: (a) there are none of the following for the entity: (i) material financial risks relating to climate; (ii) material financial opportunities relating to climate; and (b) none of subsections (2), (4) and (5) of this section apply to the entity; the climate statements for the year are: (c) a statement of the circumstance mentioned in paragraph (a) of this subsection; and (d) a statement explaining how paragraph (a) of this subsection applies to the entity for the financial year.”
Corporations Act 2001, s 296B(1)
So an NGER reporter; a registered scheme, registrable superannuation entity or retail CCIV with assets of $5 billion or more; or an entity meeting 2 of the $200 million, $500 million and 250-employee tests cannot use it. What a full climate statement holds is in the guide to what a climate statement contains.
Smaller businesses in the value chain
A business outside every group can still be asked about its emissions. ASIC says a large customer or supplier may ask for information for its own reporting, that in many cases large businesses are expected to use estimates and industry averages instead of collecting the data from smaller ones, and that a business finding a request hard may wish to raise it with them directly. ASIC also says the reports large businesses prepare will be public through its register.