Australia’s climate disclosure regime is designed to bring climate‑related information into the statutory reporting cycle – not as a standalone ESG document, but as a sustainability report lodged alongside financial statements with director oversight and growing assurance requirements. As organisations begin to unpack what this means for them, one of the first questions they ask is, “Do we need to report – and when?”
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This guide breaks down the three reporting groups, what triggers each start date, and why these timelines matter for finance and reporting teams preparing for the mandate.
If you’d like a broader view of why climate disclosures now sit inside the Corporations Act 2001 – and what that means for finance leaders – our introduction to Australia’s climate reporting shift provides that context.
A phased introduction across three groups
The Government’s framework introduces climate reporting in stages to allow organisations time to prepare, upgrade their reporting processes, and build the evidence required to support disclosures. The mandate applies to entities with financial reporting obligations under Chapter 2M of the Corporations Act, and the start date is determined by the first financial year beginning on or after specific commencement dates.
Group 1: starting from 1 January 2025
Group 1 captures the largest entities – those meeting the highest revenue, asset, or employee thresholds, and NGER reporters above the publication threshold. For these entities, climate reporting begins in the first financial year starting on or after 1 January 2025
This group includes some of Australia’s most complex organisations, often with extensive subsidiaries, multijurisdictional operations, and high levels of stakeholder scrutiny. They also tend to have the most mature governance and data practices – but even so, the mandate will test whether their processes can support an entirely new category of assured reporting.
Group 2: starting from 1 July 2026
Group 2 includes medium‑large entities meeting the next set of size thresholds and all other NGER reporters. Their obligation begins in the first financial year starting on or after 1 July 2026.
These organisations may not face the same scale as Group 1 but will still need to uplift their statutory reporting processes and data governance to ensure climate information can be prepared, reviewed, approved, and assured within tight timelines.
Group 3: starting from 1 July 2027
Group 3 covers mid‑sized entities. Reporting begins in the first financial year starting on or after 1 July 2027.
A key nuance for Group 3 is that if the entity concludes it has no material climate‑related financial risks or opportunities, it may provide a statement to that effect – along with the reasoning behind that conclusion. This is not an opt‑out. It’s a disclosure obligation with governance expectations.
If you’re trying to unpack how this plays out in practice, our article on the five biggest misconceptions helps clarify what the mandate does and doesn’t require.
Climate disclosures align with the financial reporting cycle
One of the most important – and least understood – aspects of the mandate is that climate disclosures are not standalone. They sit within a new sustainability report that must be lodged with ASIC at the same time as the financial report, covering the same reporting entity and reporting period.
This means climate reporting becomes part of the financial close. Deadlines are fixed. Capacities are limited. Assurance windows are tight. Finance teams cannot treat climate data as a parallel project – it must integrate with existing statutory processes.
Why these timelines matter now
For many organisations, FY25 and FY26 planning cycles are already underway. Even if you’re in Group 3, the volumes of data, the need for evidence, and the cross‑functional coordination required mean preparation needs to begin well before the first reporting year starts. A few themes are emerging in conversations across finance and reporting teams.
1. Climate reporting will stress‑test manual processes.
Most organisations rely on manual, entity‑level statutory reporting approaches – with data spread across ERPs, spreadsheets, local templates, and shared drives. These processes already create challenges such as errors, visibility gaps, and version control issues. Climate data, which requires traceability and repeatability, amplifies these risks.
2. Entity‑level variation creates risk.
Many groups operate with different templates, disclosure practices, and maturity levels across subsidiaries. That variation may be manageable today but becomes a material risk when climate information must be assured and lodged as part of the statutory reporting pack.
3. Audit expectations will rise quickly.
Climate disclosures will be subject to growing scrutiny. Directors must declare that reasonable steps were taken to ensure compliance in early years. Assurance will scale over time, and the same auditor who signs the financials must sign the sustainability report.
4. Data foundations matter.
Climate reporting depends on activity data, organisational structure data, and methodology data – all of which must be consistent, traceable, and supported by evidence packs. These disciplines mirror the financial close, which is why many organisations are starting to treat climate reporting as an extension of statutory reporting rather than a sustainability initiative.
What to do next
Whether you’re in Group 1, 2 or 3, the most important thing you can do now is understand your timing and begin assessing your reporting environment. You don’t need to solve every challenge at once. But you do need to start building the governance, data practices and reporting foundations that will support your first sustainability report.
Our upcoming whitepaper will explore the mandate in detail and offer practical guidance for preparing your finance and reporting processes for the shift ahead.
