Listed entities to include sustainability reports when filing audited annual reports with Appendix 4E

The first mandatory sustainability reports, comprising only the climate-related disclosures, are required in Australia for Group 1 entities reporting for years ending 31 December 2025. With this in mind, affected entities should consider the practicalities, such as what must be lodged, with whom, and by when.

Is the sustainability report part of the annual report?

Section 292 of the Corporations Act 2001 requires certain entities to prepare a financial report and directors’ report and lodge them with the Australian Securities and Investments Commission (ASIC). This applies to listed entities, unlisted disclosing entities, unlisted public companies, registered schemes, registrable superannuation entities, large proprietary companies and some small proprietary companies. Listed entities also have to comply with the reporting obligations of the exchanges on which they are listed.

For financial years beginning on or after 1 January 2025, and subject to a phasing-in period, section 292A also requires some of these entities to prepare a sustainability report if they meet certain criteria.

The sustainability report forms part of the annual report lodged with ASIC under section 319 of the Corporations Act 2001 and, therefore, comprises the:

• Financial report (containing the financial statements, notes, directors’ declaration, and, if applicable for public companies, the consolidated entity disclosure statement)
• Directors’ report (including the remuneration report for listed companies), and
• Sustainability report.

Can the sustainability report be lodged later than the financial report and directors’ report?

No. The sustainability report cannot be lodged with ASIC after the financial report and directors’ report. This is because the sustainability report currently comprises only the climate-related disclosures prepared in accordance with AASB S2 Climate-related Disclosures. Paragraph 64 of Appendix D to AASB S2 is clear that climate-related financial disclosures must be reported at the same time as the related financial statements.

This applies equally to all entities required to prepare a sustainability report, whether they are private, unlisted public or listed groups and entities.

Is any transitional relief available in the first year?

AASB S2 does not provide any transitional relief for entities to lodge their sustainability reports after their financial report and directors’ report. The one-off relief in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, Appendix E4, which allows an entity to report its first sustainability report after the publication of its financial statements, does not apply in Australia.

Do listed entities lodge sustainability reports with ASIC or the ASX?

While there is a requirement to lodge with ASIC, listed entities generally file their preliminary final report (Appendix 4E) and the audited annual report only with the ASX. The annual report includes the sustainability report.

ASIC: Section 319 requires entities to lodge the annual report (and auditor’s report(s)) with ASIC within three months of the end of the financial year.

ASX: Listed entities (other than mining exploration entities and oil and gas exploration entities) are required to lodge a preliminary final report (Appendix 4E) with the ASX within two months of the end of the financial year. This information does not require auditing.

Listed entities must also give the ASX a copy of the documents lodged with ASIC (under section 319) when they lodge them with ASIC, and this must be no later than three months after the end of the financial year. However, to avoid documents having to be lodged twice, ASIC deems electronic lodgement with the ASX to meet an entity’s section 319 lodgement obligations (refer to ASIC Corporations (Electronic Lodgement of Financial and Sustainability Reports) Instrument 2016/181).

Have there been changes to Appendix 4E to include sustainability disclosures in the preliminary final report?

The Appendix 4E has not been amended, so sustainability disclosures are not required when listed entities lodge their Appendix 4E preliminary final report within the two-month ASX reporting deadline. However, this is only true if the information accompanying the Appendix 4E is not audited.

Will the ASX suspend listed entities for failing to lodge their sustainability reports on time?

The ASX released a Consultation Paper proposing to change Listing Rule 17.5, with the effect that late lodgement of a sustainability report will not trigger a mandatory suspension of trading in the entity’s securities (noting that the explanatory materials for sustainability reporting did not discuss suspension of trading). This will maintain the status quo, ensuring that mandatory suspension only occurs if the entity fails to lodge the annual financial report, directors’ report and the auditor’s report by the due date.

Other reasons for the ASX’s proposals include practical issues in enforcing mandatory suspension. For example, not all listed entities will be required to prepare sustainability reports, and the ASX may not be aware whether it meets any of the thresholds until after the financial year has ended, resulting in suspension occurring sometime after the lodgement deadlines. This would create an unnecessary risk to the fair, orderly and transparent operation of the market.

Comments on the Consultation Paper are due by 28 November 2025, with a final rule amendment expected to be released in December 2025.

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