Jurisdictions · Australia
Directors sign the climate statements. That is the whole regime in one sentence.
Australia did not ask companies to publish a climate report. It added a sustainability report to Chapter 2M of the Corporations Act, gave it a directors' declaration, pointed an auditor at it and wrote a temporary liability shield because it understood what it was asking. Everything difficult about the Australian regime follows from that structure.
This page is about the obligation and the exposure: what the report legally is, what the directors are declaring, what the modified liability settings actually protect, and how ASIC says it will behave. For what has to be in the disclosures and when they get assured, see AASB S2 and the ASSA 5010 timetable, which also carries the cohort thresholds and dates.
What is filed
A sustainability report is four things, and one of them is a signature.
Section 296A gives the report its contents: the climate statement for the year, the notes to it, any further statements the regulations prescribe, and a declaration by the directors. The declaration is not a formality bolted on at the end. It is the mechanism that makes the rest of it enforceable, and it is the reason this became a finance problem rather than a sustainability one.
For the first three years the declaration is softened. Rather than declaring that the substantive provisions are in accordance with the Act, directors may declare that the entity has taken reasonable steps to ensure they are. That transitional wording sits in section 1707C and it expires. From financial years commencing on or after 1 January 2028 the declaration is unqualified.
Reasonable steps is a lower bar than accuracy, but it is not a low bar, and it is a bar of a particular shape: it asks what process you followed. A director defending a reasonable-steps declaration is describing the review and approval trail behind the numbers, not the numbers. If that trail is a set of emails, the declaration is doing a lot of work unsupported.
s296D
Modified liability
The shield is real, and it is two shields of different lengths.
Under section 1707D, no action other than a criminal action or an action brought by ASIC can be taken against a person over a protected statement. An investor cannot sue claiming a protected statement was misleading. That is a significant protection, and it is the reason Australian companies were willing to publish scenario analysis at all.
What is almost always reported as a single three-year immunity is in fact two categories with two different clocks. Getting this wrong in either direction is expensive: assume three years for everything and you are exposed a year early, assume one year for everything and you disclose more defensively than you need to.
Scroll sideways →
| Protected statement | Covers financial years commencing | In practice |
|---|---|---|
| Scope 3 emissions, scenario analysis, transition plans |
1 Jan 2025 to 31 Dec 2027 |
Three years. ASIC's guidance indicates this extends to statements about the inputs and assumptions behind those disclosures, which is where most of the judgement sits. |
| Any climate statement that is about the future when it is made |
1 Jan 2025 to 31 Dec 2025 |
One year. A forward-looking climate statement that is not about scope 3, scenario analysis or a transition plan loses protection for years commencing in 2026. |
As set out in Table 3 of ASIC Regulatory Guide 280. The protection also reaches the auditor's report, and it follows the same statement into certain other disclosures required by Commonwealth law — continuous disclosure, the operating and financial review, a prospectus, a product disclosure statement — but only where the statement is reproduced.
The part that catches people
You can lose the protection by explaining yourself.
A protected statement is protected because of where it sits and why it was made. ASIC's guidance is unusually direct about the consequences, and they run against the instincts of every investor relations team.
A statement is only protected if it was made in the sustainability report or the auditor's report for the purposes of complying with a sustainability standard. Disclose something beyond what the standard requires and it is not protected. Put the same content in a results presentation, an ASX announcement or a media release and it is not protected there. Include it in the sustainability report only by cross-reference to another document and the protection does not travel to it.
And the one that surprises people most: a statement that summarises a protected statement, or expands on it, is not itself protected. Where the settings do follow a statement into another Commonwealth-law disclosure, they follow a reproduction of it. Paraphrasing your scenario analysis into plainer language for the front half of the annual report is exactly the kind of helpful act that steps outside the shield.
What this implies for drafting
Keep the protected disclosures in the sustainability report, in the form the standard requires, and reproduce rather than rewrite them anywhere else they are legally required. That is an unusual instruction, because it asks you to resist making something clearer. It is also a records problem: to reproduce a statement exactly you have to know which version was filed, which is the same discipline the assurance provider will ask for.
The regulator
ASIC has said how it intends to behave, which is worth reading before you assume the worst.
Two things are true at once. ASIC retains the power to act where the immunity applies to everyone else, and it has said plainly that it will be proportionate while the regime phases in.
Reading the schedule together
The reliefs expire before the assurance arrives.
Set the liability timetable beside the assurance timetable and the design becomes clear. Directors get a softer declaration and a shield during exactly the years when the auditor is doing least. Both protections unwind before the audit obligation lands. By the time an auditor is giving reasonable assurance over the whole report, the declaration is unqualified and the shield is gone.
Which means the work that matters is the work that makes an unqualified declaration defensible: knowing where each figure came from, who reviewed it, who approved it and what was filed. That is not a climate problem and it does not get easier by waiting. It is also, almost exactly, what an assurance provider tests when the reasonable assurance years arrive.
See where your evidence stands →Six minutes, no signup. Or read the AASB S2 requirements and assurance phasing, check which cohort you are in, or see who signs off in practice.