Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia have provided feedback to the Australian Securities and Investments Commission (ASIC) regarding Consultation Paper 380 (CP 380) on Sustainability Reporting.

CA ANZ and CPA Australia support ASIC's efforts to develop guidance for Sustainability Reporting as introduced by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (FMI Bill).

In our joint submission, we emphasise the importance of aligning sustainability reporting guidance with existing financial reporting practices in Australia to ensure coherence and clarity.

Key concerns and recommendations include:

• Aligning terminology in the Regulatory Guide with users' needs and expectations.
  • Providing further guidance on interpreting thresholds under s292A of the legislation.
  • Clarifying the application of modified liability settings for entities adopting AASB S2 during the modified liability period.
  • Extending existing ASIC exemptions for financial reports to sustainability reports.
  • Considering a class exemption to limit the audit requirement for Group 3 entities when there are no material climate-related risks or opportunities.
  • Addressing the interconnectedness of financial and sustainability reporting and the need for practical considerations.
  • Recommending that ASIC's Regulatory Guide remain silent on independence matters, allowing assurance practitioners to refer to the IESBA Code of Ethics.
  • Suggesting ongoing updates and guidance from ASIC based on practical experience during the first years of sustainability reporting.