Are you considered an asset owner for Group 2 climate reporting purposes?

Article

Updated: June 18, 2025 |

This article was originally published April 2024.

Legislation to mandate sustainability reporting in Australia (initially only for climate-related disclosures) was passed by the Senate on 22 August 2024 and received Royal Assent on 17 September 2024. The start date is for years commencing 1 January 2025, with a phase-in period for entities of different sizes and types. Entities must report their climate disclosures in the second group (Group 2 entities) if they meet one of the criteria shown in the table below.

Criteria 1: Size thresholds

Criteria 2: National Greenhouse Energy Reporting (NGER reporters)

Criteria 3: Asset owners

The entity and its controlled entities satisfy at least two of the following three criteria:

Consolidated revenue for the financial year of $200 million or more
End-of-year consolidated gross assets of $500 million or more
End-of-year employees of 250 or more,

Section 296B(2)

Under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), the entity is either:

A registered corporation, or
Required to apply to be registered under section 12(1).

Section 296B(4)

Both the following criteria are met:

The entity is a registered scheme, registrable superannuation entity or a retail corporate collective investment vehicle (CCIV)
The value of its assets at the end of the financial year of the entity and the entities it controls is $5 billion or more.

Section 296B(5)

Government’s initial Policy Statement

‘Asset owners’ is a term used in the Government’s initial Policy Statement to denote a class of entities that would be part of the second group (Group 2 entities) required to prepare mandatory climate disclosures. It referred to entities with $5 billion or more of ‘assets under management’, and this terminology has stuck.

Who is an ‘asset owner’?

The term ‘asset owner’ is not defined in the final climate reporting legislation contained in Chapter 2M of the Corporations Act 2001. Rather, section 296B(5) applies only to the following types of entities:

Registered schemes
Registrable superannuation entities (RSEs), and
Retail corporate collective investment vehicle (CCIVs).

These are the usual types of investment vehicles used for public investing. Private family investment companies with $5 billion or more in assets will only have to prepare mandatory climate disclosures if they meet two out of the three size thresholds shown in the table above.

What is meant by ‘assets under management’?

The final climate reporting legislation also doesn’t refer to the term ‘assets under management’. Instead, section 296B(5) sets out how assets are determined to assess whether Criteria 3 is met.

It is based on the value of assets at the end of the entity’s financial year (i.e. the registered scheme, RSE or retail CCIV) and all entities that it controls (if any). The value of these assets must be $5 billion or more.

Is the asset size test in Criteria 1 and Criteria 3 the same?

No. It is important to note that the calculation of assets for the size threshold in Criteria 3 is different to that in Criteria 1:

Criteria 1 is based on consolidated gross assets recognised by applying AASB 10 Consolidated Financial Statements
Criteria 3 is the value of assets of the entity and the entities it controls.

The reason for differing terminology is that many registered schemes, RSEs and retail CCIVs under Criteria 3 are likely to be investment entities that don’t consolidate subsidiaries in accordance with the exception contained in paragraph 31 of AASB 10. Had Criteria 3 referred to ‘consolidated gross assets’, much of the investment value of investments would not be captured within the $5 billion asset threshold.

How BDO can help

Our sustainability reporting experts can help you determine your climate reporting obligations during the phase-in period, and get you started on your sustainability reporting journey.