Australia’s mandatory climate reporting regime is rolling out in waves, and if your company isn’t required to report today, that could change faster than you think. With clear thresholds expanding to capture smaller organisations each year, the question isn’t whether climate reporting will affect your business, but when.
The Three Waves of Mandatory Reporting
Group 1 (from January 2025): Companies meeting two of three criteria: revenue of $500 million or more, assets of $1 billion or more, or 500+ employees. All NGER reporters above publication threshold are also included.
Group 2 (from July 2026): The net tightens with lower thresholds: $200 million revenue, $500 million assets, or 250+ employees. All remaining NGER reporters must also comply, plus asset owners with $5 billion under management.
Group 3 (from July 2027): Capturing mid-sized businesses with $50 million revenue, $25 million assets, or 100+ employees.
Unexpected factors that can get you into one of these groups faster than you think:
If your organisation is exposed any of the following, it maybe be wise to start preparing now:
Rapid growth trajectory: Businesses expanding operations, increasing headcount, or pursuing aggressive revenue targets often cross thresholds unexpectedly.
Supply chain pressure: Even smaller companies face indirect pressure when major customers require emissions data for their Scope 3 reporting.
Private to public transitions: Companies considering ASX listing or becoming public automatically enter stricter reporting requirements.
Acquisition activity: Mergers or acquisitions can push combined entities over reporting thresholds overnight.
Energy-intensive operations: Manufacturing, transport, agriculture and mining businesses often cross NGER thresholds before revenue thresholds.
What Needs Reporting
Under AASB S2, companies must disclose climate governance structures, risk management strategies, Scope 1, 2 and 3 emissions, scenario analysis for 1.5°C warming and warmer scenarios, plus detailed transition plans.
The reality is stark: Australia lacks sufficient climate reporting expertise to meet demand. Universities don’t yet offer comprehensive climate reporting qualifications, and most companies lack Chief Sustainability Officers or dedicated sustainability teams.
Whether you’re in Group 1, 2, 3 or not yet captured, start building climate reporting capabilities now. The expanding thresholds and supply chain requirements mean most Australian businesses will eventually need robust ESG data management and reporting systems.
Are you ready?
David Martin F FIN is a technology leader with deep expertise in regulatory compliance, data governance, and secure digital innovation. With over 15 years’ experience designing and scaling platforms for highly regulated industries, David has delivered robust, audit-ready solutions for multiple industries. He is passionate about empowering Australian organisations to meet evolving sustainability standards through practical technology and operational excellence.
Learn more at esgcomplianceaustralia.com.au or connect with David on LinkedIn.
Further Reading:
https://www.aicd.com.au/content/dam/aicd/pdf/tools-resources/director-resources/directors-guide-to-mandatory-climate-reporting-web.pdf
https://aasb.gov.au/media/xpilzp2e/overviewofasrs_04-25.pdf
https://www.anthesisgroup.com/au/insights/asrs-and-aasb-s2-a-guide-to-mandatory-climate-reporting-in-australia/
https://www.bdo.com.au/en-au/insights/esg-sustainability/timeline-for-audit-assurance-over-your-sustainability-report
https://cer.gov.au/schemes/national-greenhouse-and-energy-reporting-scheme/assess-your-obligations
https://www.hfw.com/insights/mandatory-climate-related-financial-disclosures-australia-takes-key-step-on-its-sustainable-finance-roadmap/
https://www.greenbase.com.au/aasbs2
https://www.anthesisgroup.com/au/insights/what-is-ngers-who-needs-to-report/
https://standards.aasb.gov.au/sites/default/files/2024-10/AASBS2_09-24.pdf
https://www.westpaciq.com.au/thought-leadership/2024/12/mandatory-climate-reporting-what-do-you-need-to-know
https://www.bdo.com.au/en-au/insights/esg-sustainability/no-delay-for-climate-reporting-by-group-2-and-group-3-entities
https://asic.gov.au/about-asic/news-centre/speeches/addressing-financial-system-climate-risk-a-view-from-the-regulator/
https://www.asic.gov.au/regulatory-resources/sustainability-reporting/for-preparers-of-sustainability-reports/how-and-when-to-lodge-your-sustainability-report/
https://treasury.gov.au/sites/default/files/2024-01/c2024-466491-policy-state.pdf
https://www.gtlaw.com.au/insights/mandatory-climate-related-financial-disclosure-has-commenced-what-you-need-to-know-about-the-new-regime,-standards-and-regulatory-guidance
https://download.asic.gov.au/media/j4rhwyiz/rg280-published-31-march-2025.pdf
https://greenly.earth/en-gb/blog/company-guide/the-national-greenhouse-and-energy-reporting-nger-scheme
https://www.allens.com.au/insights-news/insights/2024/09/mandatory-climate-related-financial-reporting-legislation/
https://www.ey.com/content/dam/ey-unified-site/ey-com/aus-nzl/documents/pdfs/mandatory-climate-related-financial-disclosures-what-you-need-to-know.pdf