- Article Summary
-
Introduction
ASIC’s release of sustainability reporting educational modules for smaller companies marks an important moment in Australia’s regulatory transition. While the modules are framed as guidance rather than enforcement, they highlight a clear shift in how sustainability reporting is spreading through the economy. Mandatory climate and sustainability disclosures now apply to large companies under the Corporations Act, and the effects are already being felt well beyond those entities. For many smaller companies, sustainability reporting is becoming a practical business requirement driven by customers, investors, and supply chain relationships.
Why ASIC Is Focusing on Smaller Companies Early
ASIC’s decision to publish sustainability reporting modules for smaller companies reflects how the reporting framework operates in practice. Large companies subject to mandatory sustainability reporting must disclose governance, strategy, risk management, metrics, and value chain emissions. Much of this information sits outside their own operations. To meet audit and assurance expectations, reporting entities need consistent and credible data from suppliers. ASIC’s modules help smaller companies understand climate fundamentals and reporting concepts so that data flowing through supply chains is more reliable and comparable.
How Mandatory Reporting Extends Into the Supply Chain
Although smaller companies are not generally required to lodge sustainability reports with ASIC, they are increasingly asked to provide climate related information to larger customers. These requests are directly linked to statutory reporting obligations. Large companies must assess climate risks across their operations and value chains and disclose material Scope 3 emissions. As a result, suppliers are asked to share emissions data, explain climate risk exposure, and describe basic governance and risk management practices.
Sustainability Reporting Requirements and Indirect Impact on Smaller Companies
| Reporting area | What ASIC requires from reporting entities | How smaller companies are indirectly affected through supply chains |
|---|---|---|
| Governance | Disclosure of board and management oversight of climate related risks and opportunities | Large customers may ask suppliers to clarify who is responsible for sustainability or climate topics and whether oversight processes exist |
| Strategy | Assessment of climate related risks and opportunities and their impact on business strategy and financial planning | Smaller companies may be asked to explain how climate risks affect operations, locations, costs, or long term planning |
| Risk management | Explanation of how climate related risks are identified, assessed, and managed | Suppliers are increasingly asked to describe how they identify climate risks, manage disruptions, and reduce exposure across operations |
| Metrics and targets | Reporting of climate related metrics and any climate related targets | Smaller companies may need to provide emissions related data, energy use, or progress indicators to support customer disclosures |
| Scope 3 emissions | Disclosure of material value chain emissions | This creates the strongest indirect reporting pressure, as suppliers provide activity data or emissions estimates that feed into customers’ Scope 3 calculations |
When Reporting Pressure Begins: The ASIC Timeline
For smaller companies, the reporting timeline explains why sustainability data requests are arriving earlier and with greater urgency. Reporting entities must prepare, audit, and lodge sustainability reports within defined periods after the end of the financial year. This compresses data collection into a short window, pushing large companies to request information from suppliers well before formal reporting deadlines.
When Sustainability Reports Are Prepared and Lodged
| Stage | What happens |
| Financial year end | Reporting period closes, usually 30 June or 31 December |
| Preparation and audit | Sustainability report is prepared and audited |
| Lodgement with ASIC | Report is lodged within three or four months after the end of the financial year |
| Publication | Report is provided to members or made publicly available |
| Amendments if required | Updated reports are lodged within fourteen days |
What This Means for Smaller Companies
For smaller companies, sustainability reporting is increasingly shaped by commercial relationships rather than direct regulation. Suppliers that understand climate concepts, can provide basic emissions data, and can explain climate risks affecting their operations are better positioned to respond to customer expectations. ASIC’s educational modules offer a practical entry point for building this capability. As mandatory reporting becomes embedded in financial and audit processes, sustainability information is likely to become a standard part of procurement, contracting, and supplier assessment.
Conclusion
ASIC’s sustainability reporting modules signal how regulatory change is reshaping expectations across the Australian economy. While formal reporting obligations currently apply to larger companies, the flow of climate data through supply chains means smaller companies are already part of the reporting ecosystem. Understanding governance, strategy, risk management, metrics, and Scope 3 emissions is becoming essential for maintaining market access. Early preparation allows smaller companies to adapt smoothly as sustainability reporting becomes a standard feature of doing business.
Why Work with ASUENE Inc.?
ASUENE is a key player in carbon accounting, offering a comprehensive platform that measures, reduces, and reports emissions. The company serves over 10,000 clients worldwide with an all-in-one solution that integrates GHG accounting, ESG supply chain management, a Carbon Credit exchange platform, and third-party verification.
ASUENE supports companies in achieving net-zero goals through advanced technology, consulting services, and an extensive network.
