Climate reporting has stopped being optional. So has the story you tell with it.
For a while, “sustainability strategy” was a page in the annual report. Then AASB S2 made it law – and investors started reading disclosures the way they read everything else that matters: for signs of whether you actually know what you’re doing.
Mandatory climate reporting is no longer a future problem for Australia’s largest organisations – it’s a current one. Group 1 entities (those meeting at least two of $500 million revenue, $1 billion in assets or 500 employees) have been reporting under AASB S2 since financial years beginning 1 January 2025, and ASIC had 259 sustainability reports on its desk by May 2026. Group 2 follows from July 2026, Group 3 from July 2027. If your organisation isn’t reporting yet, it will be soon.
Here’s what that changes: the compliance box is now table stakes. The organisations getting genuine value from the new regime aren’t the ones doing the minimum to stay compliant – they’re the ones using the requirement to answer the question investors have always asked, just with far better evidence to test it against: can this organisation manage risk and create value over the long term?
Here’s what they’re actually looking for when they read yours.
Do you understand your own risk?
Investors don’t expect zero risk – they expect evidence that physical and transition risks have been identified, costed and built into decision-making. It’s a live gap: EY’s 2025 Global Climate Action Barometer found that among 857 self-described climate leaders worldwide, only 19% had adopted actual plans to mitigate the physical risks they’d disclosed. Naming a risk isn’t the same as managing it, and investors can tell the difference.
Is your board actually across it?
Governance is the tell. The AICD’s 2024 Climate Governance Study found 80% of Australian directors see climate change as a material risk to their business – but only 45% believe their board has the skills to deal with it, and 58% have no board-level sustainability committee at all. ASIC’s own early observations on the new regime specifically call out governance clarity as a marker of quality. If your report can’t show who’s accountable and how issues get escalated, investors will assume no one is.
Can you back your commitments with something other than adjectives?
Greenwashing scepticism now comes with real financial consequences. ASIC has taken three companies to the Federal Court over unsubstantiated sustainability claims (Mercer, Vanguard and Active Super), for a combined $34.7 million in penalties. Meanwhile, 78% of Australians say they’re wary of greenwashing, up from 72% two years earlier, and globally, 85% of institutional investors say the problem has gotten worse, not better. Every claim in your disclosure needs a number behind it, or it’s a liability dressed up as a strength.
What happens when things don’t go to plan?
Resilience, not ambition, is what investors are actually pricing in. PwC’s 2025 Global Investor Survey found 61% of investors would increase their investment in companies using sustainability data to genuinely improve operational efficiency, not just to look good on paper. It’s telling that ACSI recorded a 9% year-on-year rise in ASX200 companies stress-testing resilience against carbon-pricing scenarios – the market’s already moving this way.
Is the data behind your report actually reliable?
Reporting quality has become a proxy for governance quality. KPMG’s ASX100 research found third-party assurance of sustainability disclosures jumped 13 percentage points in a single year, to 67%, and EY found 64% of investors specifically want independent assurance to guard against greenwashing risk. If your numbers can’t survive an audit, they won’t survive investor scrutiny either.
Are your targets real, or just optimistic?
Ambition is cheap; credible delivery isn’t. ACSI’s research shows 66% of ASX200 companies now hold a net-zero commitment, but only 29% have set the Scope 3 targets that actually make that commitment measurable. Investors have largely stopped rewarding the headline and started asking for the implementation plan behind it.
Can anyone outside your sustainability team understand what you’ve written?
ASIC’s guidance is unambiguous here: disclosures need to be organisation-specific, not generic boilerplate. Institutional investors’ use of ESG information rose 88% year-on-year, according to EY – which means more people are reading your report more closely, not less. Clarity isn’t a nice-to-have. It’s the difference between being understood and being ignored.
The real story your disclosure is telling
None of this is really about climate. It’s about whether your organisation is a good place to put money for the next decade – and climate disclosure just became one more piece of evidence investors get to weigh. The organisations getting genuine value from mandatory reporting aren’t ticking a box. They’re using the requirement to demonstrate exactly what investors were already looking for: governance that works, risk that’s understood, and a story that holds up when someone checks the numbers.
Three places to start
Pressure-test your last disclosure against these seven questions. Wherever you’re asserting instead of evidencing is exactly where investors will catch you out.
Attach a number to every commitment. If a claim in your report can’t be measured, dated or audited, it isn’t ready to publish – it’s a candidate for the next greenwashing case.
Read it as if you had no context. If a first-time investor couldn’t follow your governance structure or your targets without a glossary, the report isn’t finished. It’s just compliant.
Get in touch
If your organisation is preparing for its first climate disclosure, or reviewing whether last year’s report actually built the confidence it should have, that’s exactly where Collier Creative’s Investor Communications team works. We help ASX-listed and pre-IPO organisations turn mandatory reporting into something investors actually want to read: clear, credible, and built to hold up under scrutiny. Get in touch to talk through where your reporting currently stands.
Sources
• Australian Accounting Standards Board (AASB), AASB S2 Climate-related Disclosures, September 2024
• ASIC, Early observations on sustainability reporting, 18 May 2026
• ASIC, greenwashing enforcement media releases: Mercer Superannuation (24-173MR), Vanguard Investments Australia (24-213MR), Active Super (25-042MR)
• EY, 2025 Global Climate Action Barometer
• EY, Institutional Investor Survey, 2024
• AICD / Pollination, Climate Governance Study, March 2024
• RIAA, From Values to Riches, 2024
• PwC, Global Investor Survey, 2025
• ACSI, Promises, Pathways & Performance: Climate change disclosure in the ASX200, July 2024
• KPMG Australia, Sustainability Reporting Survey – ASX100 insights, 2024
Take-outs for design
Three verbatim passages selected as raw material for standalone visual engagement assets – pull-quote cards, stat callouts, comparison graphics.
The Stat “ASIC has taken three companies to the Federal Court over unsubstantiated sustainability claims (Mercer, Vanguard and Active Super), for a combined $34.7 million in penalties.”
The Contrast “66% of ASX200 companies now hold a net-zero commitment, but only 29% have set the Scope 3 targets that actually make that commitment measurable.”
The Big Idea “None of this is really about climate. It’s about whether your organisation is a good place to put money for the next decade.”