Australia Group 2 climate reporting preparation in 2026

For Australian entities entering Group 2 climate reporting, preparation should begin with a documented scope assessment and an evidence calendar. Writing the report at the end of the financial year is too late to discover that a key assumption has no owner or a supplier request covers the wrong period.

ASIC states that the second reporting cohort applies to financial years commencing on or after 1 July 2026. That is a reporting-period commencement date, not a universal filing deadline. Whether an entity is in scope depends on its Chapter 2M financial reporting obligation and the applicable sustainability reporting thresholds. Use ASIC’s scope guidance and Regulatory Guide 280 for the entity-specific assessment.

The workflow below is our recommended implementation approach. It is also useful for New Zealand suppliers receiving information requests from Australian customers, without treating those requests as an automatic Australian statutory reporting obligation for the supplier.

Have finance and the company’s reporting advisers identify the legal entity, reporting year, relevant threshold route and supporting calculations. Record why the entity belongs in a particular cohort, including any relief or exemption relied upon. A group brand name or approximate turnover estimate is not a sufficient scope assessment.

Assign a person to maintain this decision when acquisitions, restructurings or reporting-year changes occur. Keep the assessment separate from the data collection plan so the team can see both why reporting is required and how the work will be completed.

An entity with a financial year beginning on 1 July 2026 would start that annual period on that date if it is in the relevant cohort. A different year-end requires its own calendar. Confirm lodgement and assurance requirements separately rather than deriving them from a headline about July commencement.

ASIC describes climate reporting as addressing governance, strategy, risk management, and metrics and targets. A practical preparation meeting should therefore include finance, operations, risk and procurement. An emissions spreadsheet is only one part of the reporting work.

For each potentially material climate issue, build a working note connecting the exposure to an operational or financial decision. Identify the location or activity, relevant time horizon, underlying assumptions, existing response and missing information. The final materiality assessment and disclosure must follow the applicable requirements; the note is a preparation aid.

For example, a management team considering warehouse resilience could link its risk assessment to maintenance plans, insurance information and investment decisions. Avoid converting a generic regional hazard statement into a precise financial loss without a supported assessment.

Create a calendar that identifies what is collected monthly, what is reassessed during the year and what needs year-end review. Assign an owner and reviewer to each material data stream. Agree how documents are retained and how changes to estimates are recorded.

Use a register that links each proposed disclosure to its evidence and approval. Include the reporting boundary, period, calculation version, unresolved limitations and responsible person. Where data is supplied by another function, record its sign-off rather than treating an emailed attachment as a final approved result.

Arrange an early discussion with the assurance provider about the applicable scope and evidence expectations. Do not describe internal checking as external assurance, and do not promise an assurance conclusion before the engagement has been performed.

ASIC explains that smaller businesses may receive value-chain information requests from larger customers. It also recognises the use of estimates and industry averages in relevant circumstances. A request should therefore explain the purpose, required information and acceptable basis rather than demand an undefined “fully compliant ESG report.”

For a New Zealand supplier, our suggested response starts with four questions: which Australian customer entity needs the data, what reporting period is required, what boundary should the data cover, and what calculation or allocation method is expected? Clarify confidentiality and acceptable alternatives before committing to a delivery date.

A customer request does not by itself determine the supplier’s duties under New Zealand law. The supplier should assess its own legal obligations separately. This guide addresses the commercial information exchange, not the scope of New Zealand’s climate disclosure regime.

Assume an Australian distributor asks a New Zealand supplier for emissions associated with products supplied during the distributor’s reporting year. The supplier has a corporate inventory for a different year but no product-level footprint. These are invented facts intended to illustrate the decision, not a client case study.

Sending the corporate total as though it were the emissions of those products would obscure the boundary. A more useful response identifies the available inventory period, covered operations, limitations and any proposed allocation basis, then seeks the customer’s agreement on a suitable method or alternative data.

The distributor should record whether the received information is suitable for its reporting purpose and explain any estimation approach used. Both sides should retain the final agreed response so an updated spreadsheet does not silently change the basis.

Assume a fictional Group 2 entity has confirmed that its first relevant year runs from 1 July 2026 to 30 June 2027. These are suggested internal checkpoints, not statutory deadlines or evidence that any review has already happened.

The manager should be able to ask a specific question: “Which disclosure depends on the missing warehouse meter record, and what can we support until it arrives?” Counting uploaded files does not answer that question.

For example, mark the warehouse quantity provisional while retaining the accepted site boundary and known months. Do not mark the entire climate report complete because the emissions table has a total. Likewise, one unresolved supplier request should not stop unrelated governance evidence being prepared. The calendar connects work to decisions while keeping limitations visible. Actual filing dates and assurance obligations remain a separate, entity-specific assessment.

Ask for the documented applicability assessment, evidence calendar, ownership gaps and unresolved supplier requests. Review whether climate assumptions used in reporting are consistent with business planning, or whether differences need explanation. Keep decisions and follow-up dates in the meeting record.

Does every supplier need a separate assured footprint? Do not assume so from a general request. Clarify the actual requirement and assess permissible methods and evidence quality.

Is July 2026 the deadline to lodge? No. For Group 2 it identifies the earliest financial-year commencement under the phased regime; the entity’s period and applicable lodgement rules determine the later timetable.

Can work start before every measurement is available? Yes. Assigning owners, mapping evidence and documenting known limitations are useful preparation steps. They do not remove the need to resolve material gaps before making the relevant disclosure.

ASIC who must prepare a sustainability report — Primary source supporting the regulatory or methodological statements above. Operational workflows and examples are QSE Advisory recommendations.

ASIC sustainability reporting for small business — Primary source supporting the regulatory or methodological statements above. Operational workflows and examples are QSE Advisory recommendations.

ASIC Regulatory Guide 280 — Primary source supporting the regulatory or methodological statements above. Operational workflows and examples are QSE Advisory recommendations.

ASIC when and how to lodge — Primary source supporting the regulatory or methodological statements above. Operational workflows and examples are QSE Advisory recommendations.

Explore more guidance in the Sustainability and Carbon hub.

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