Jackie Spiteri
ASIC’s 2026 Enforcement Focus: What It Means for Climate Disclosures
Why early preparation, defensible data, and strong governance will matter more than ever.
Climate-related financial disclosure in Australia has entered a new phase, one defined not only by mandatory reporting, but by regulatory scrutiny.
From 2026, the Australian Securities and Investments Commission (ASIC) will begin its first formal review of sustainability reports lodged under the Corporations Act, examining disclosures made in the first year of reporting. This marks a critical shift from policy development to enforcement.
ASIC has been clear that its approach will be guided by the objective of fostering high-quality, consistent and comparable climate-related financial disclosures, disclosures that investors and other users can rely on to make informed decisions.
For reporting entities, this signals an important reality: climate disclosures will be assessed with the same expectations applied to financial reporting. The question is no longer whether to comply, but how robust and defensible your disclosures are when reviewed.
The Regulatory Context: ASIC’s Role in Sustainability Reporting
ASIC is responsible for administering Australia’s sustainability reporting requirements under the Corporations Act and monitoring compliance with those obligations.
Importantly, ASIC has confirmed that from 2026 it will review sustainability reports lodged by reporting entities, focusing on the first year of mandatory reporting. This review will examine whether disclosures are accurate, complete, and not misleading — reinforcing that sustainability reporting is now firmly within ASIC’s enforcement remit.
ASIC has also been explicit about its directions powers. Where ASIC considers a statement in a sustainability report to be incorrect, incomplete or misleading, it may direct an entity to:
- Confirm the statement is correct or complete
- Explain the statement
- Provide supporting information or documents
- Correct, complete or amend the statement
- Publish the corrected or amended disclosure
This places a clear onus on organisations to ensure climate-related disclosures are evidence-based, well-governed, and internally consistent.
Why Climate Disclosures Are a Regulatory Priority
Sustainability reports are not produced in isolation. ASIC has emphasised that high-quality climate disclosures help maintain confidence and integrity in Australia’s capital markets, supporting better decision-making by investors, lenders, and other stakeholders.
Under AASB S2, organisations are required to disclose how climate-related risks and opportunities affect strategy, risk management, and financial performance. ASIC’s enforcement priorities reinforce that these disclosures must be:
- Decision-useful, not boilerplate
- Based on reasonable and supportable assumptions
- Consistent with financial statements and other public disclosures
- Supported by appropriate governance and internal controls
In practice, this means scenario analysis outputs, risk assessments, targets, and metrics must be clearly linked to business impacts, and capable of being explained and substantiated if challenged.
What ASIC’s 2026 Review Means in Practice
ASIC’s upcoming review creates a narrow window for organisations to prepare properly.
Key risk areas we are already seeing include:
- Manual or spreadsheet-based data collection with weak audit trails
- Inconsistent assumptions between climate and financial disclosures
- Limited documentation supporting scenario analysis and judgements
- Unclear governance roles across boards, executives and management
- Overly qualitative disclosures that lack substance
Entities that invest early in robust processes, systems, and governance will be far better placed to respond to regulatory queries, and to avoid corrective directions after reporting.
Preparing Now: A Practical Call to Action
The most effective response to ASIC’s enforcement focus is early, structured preparation.
This includes:
- Undertaking a gap analysis against AASB S2 requirements
- Strengthening governance and accountability for climate disclosures
- Ensuring data systems are consistent, reliable, and traceable
- Documenting assumptions, methodologies, and decisions
- Testing disclosures for internal consistency before publication
At SESG, we support organisations through this process, from gap analysis and scenario analysis through to disclosure development and readiness for regulatory review.