Navigating the new era of climate disclosure: key takeaways from the RIAA Conference Australia 2025

• The conference demonstrated the growing regulatory and stakeholder expectations around climate-related financial disclosures.
• For Australian businesses, the message is clear: proactive engagement with the new reporting requirements and standards will be essential.
• ASIC’s guidance and ‘pragmatic and proportionate’ approach to enforcement will provide a roadmap for navigating this evolving landscape.
• Businesses should act now to assess readiness, embed robust disclosure processes, and mitigate regulatory risk in this rapidly shifting environment.

The implementation of Australia’s new mandatory climate-related financial disclosure regime (Climate Disclosure Regime) was a central focus of the conference. ASIC Commissioner Kate O’Rourke outlined the regulator’s enforcement priorities, noting ASIC’s current role as the sole active enforcer while other regulators observe a three-year implementation pause.

Recent greenwashing litigation was discussed, with practical insights offered into ASIC’s enforcement strategy and the implications for corporate compliance. Panellists highlighted how initial enforcement under the Climate Disclosure Regime may diverge from existing regulatory approaches, including towards greenwashing, providing valuable guidance for businesses preparing to meet these emerging obligations.

Since 1 January 2025, certain Australian entities have been required to comply with mandatory climate-related financial disclosure obligations under Chapter 2M of the Corporations Act 2001 (Cth) (Act). Under s336A of the Act, these disclosures must be made in accordance with the Australian Sustainability Reporting Standards (Reporting Standards) set by the Australian Accounting Standards Board (AASB). The Reporting Standards include AASB S2, which applies to mandatory climate-related financial disclosures, and AASB S1, which addresses broader sustainability issues and remains voluntary. (See our article, Draft Australian Climate Standards: getting ready for the ‘biggest change to corporate reporting in a generation’).

As businesses navigate their obligations under the Climate Disclosure Regime, it is essential to understand the applicable reporting standards, consider ASIC’s published guidance, including its Regulatory Guide 280 published in March 2025 (RG 280), and remain informed of the regulator’s position on the regime’s implementation.

Kate O’Rourke, Commissioner, ASIC ASIC identified three key areas of focus as the Climate Disclosure Regime comes into effect:

1. Regulatory relief

ASIC is receiving applications for relief under sections 340-342 of the Act, which allow exemptions from certain reporting requirements, including sustainability disclosures. Applications have included both novel, entity-specific requests and recurring themes. While each case is assessed on its merits, ASIC has committed to publishing these decisions to provide transparency and potential precedential value.

2. Capacity building

Recognising widespread uncertainty, particularly among smaller entities, ASIC is investing in capacity building. This includes developing regulatory guidance and educational materials, with a focus on supporting Group 3 entities and others new to sustainability reporting. ASIC aims to help businesses understand their specific obligations and how to comply effectively.

3. Enforcement approach

ASIC has committed to a ‘pragmatic and proportionate’ enforcement strategy during the transition period. While it retains enforcement powers, ASIC acknowledges that entities are still building compliance capability. In the early stages, enforcement will focus on serious or reckless non-compliance or complete failure to report. This contrasts with ASIC’s more assertive stance on greenwashing, where enforcement is based on long-standing legal obligations.

ASIC reiterated that high-quality, consistent reporting is essential to maintaining market integrity. However, it recognises the regime is in its early stages and that businesses will need time to understand benchmarks and transition into full compliance. Australian businesses should assess their reporting obligations early, consider whether relief may be appropriate, and ensure consistency across disclosures to meet evolving governance expectations. To ensure your business is meeting its specific climate reporting obligations, we encourage you to speak with our experts for clear, practical legal guidance.

Recent developments in greenwashing litigation offer valuable lessons for Australian entities navigating both greenwashing and the Climate Disclosure Regime. The decisions have underscored the importance of a proactive and structured approach to managing risks in these areas. Key takeaways include:

• Structured risk management: Entities must adopt a systematic framework to identify, assess, and mitigate greenwashing risks.
• Issuer accountability: Responsibility (and liability) for sustainability claims rests with the product issuer, even when third-party data or services are used.
• Comprehensive disclosure oversight: All investor-facing communications – including websites, social media and ESG policies – must be consistent, accurate and verifiable.
• Clarity on investment exclusions: Disclosures should clearly explain exclusions and whether they apply to both direct and indirect investments.
• Consumer interpretation matters: Courts will consider how a reasonable consumer would interpret sustainability-related terms.
• Future-focused claims require evidence: Claims about future outcomes (eg net zero targets) must be supported by reasonable grounds to avoid being misleading.
• Litigation risk beyond regulators: Public interest litigation is an emerging risk area that cannot be ignored.
• Strategic alignment with fiduciary duties: Superannuation funds and other entities should reassess whether their sustainable investment strategies align with their legal obligations, including the best financial interests duty.

A recurring theme in all the presentations was the growing reliance on external data providers for ESG disclosures and the associated risks:

• Methodological inconsistencies: Different providers use varying methodologies, which may not align with an entity’s specific risk profile.
• Non-delegable responsibility: Entities remain accountable for the accuracy of disclosures, regardless of the source of data. Due diligence, verification, and ongoing monitoring are essential.
• On-the-ground verification: Site visits and direct engagement with third party providers are recommended to verify third-party data and gain deeper insights.
• Complex supply chains and geopolitical risk: Understanding ESG risks across global value chains requires investment in technology and expertise to map and manage these risks effectively.

As regulatory frameworks mature and expectations evolve, the shift toward consistent and comparable climate-related disclosures will gain momentum. Key insights from the speakers at the conference include:

Standardisation enhances confidence: The adoption of uniform reporting frameworks such as the Reporting Standards by the AASB is expected to reduce subjectivity and promote consistency across industries. This will support more reliable benchmarking and comparability of disclosures.

Recalibration of voluntary commitments: In light of emerging standards, companies may revise or withdraw previous voluntary statements, including net zero pledges, to ensure alignment with mandatory requirements and evolving best practices.

Proportional compliance: Early-stage disclosures under the new regime are not expected to be perfect. Reasonable and evidence-based estimates are acceptable, and compliance should be guided by ASIC’s regulatory expectations.

By embracing standardisation, businesses can reduce litigation risk, improve stakeholder confidence, and position themselves for long-term regulatory alignment.