Australia's Group 2 Starts Reporting After the Broad Liability Shield Has Closed

When a country phases in mandatory climate reporting, it usually pairs the obligation with a transitional liability shield. The reasoning is straightforward. Forward-looking climate statements are estimates about an uncertain future, and a regime that exposes the first filers to private litigation for getting an estimate wrong will produce vague disclosure rather than good disclosure.

Australia did this. The shield exists, it is real, and ASIC has published exactly how it works.

It is also, for the second reporting cohort, already closed.

Who is in Group 2

Australia phases its regime by cohort. ASIC’s Regulatory Guide 280 sets out three, by the commencement date of the annual reporting period.

Group 1 is annual reporting periods commencing on or from 1 January 2025 to 30 June 2026. Group 2 is periods commencing on or from 1 July 2026 to 30 June 2027. Group 3 is periods commencing on or from 1 July 2027.

An entity enters Group 2 by any one of three routes.

The first is the corporate size test. The entity, with the entities it controls, meets at least two of three criteria: consolidated revenue equal to or greater than $200 million, consolidated gross assets at the end of the financial year equal to or greater than $500 million, or 250 or more employees at the end of the financial year. These are lower than the Group 1 thresholds, which were $500 million, $1 billion and 500 employees.

The second is the asset-owner route. Registered schemes, registrable superannuation entities and retail CCIVs with assets equal to or greater than $5 billion. For a retail CCIV the $5 billion is measured across the whole CCIV, summing all sub-funds.

The third is the emissions route, and it is the one that catches people.

The NGER route has no size test

In Group 2 the emissions route reads, in full: entities that are registered corporations under the NGER Act, or are required to make an application to be registered under section 12(1) of the NGER Act.

That sentence contains no revenue figure, no asset figure and no headcount.

Compare it with the Group 1 version of the same route, which required the entity to be registered under the NGER Act and to be a member of a group that meets the publication threshold in section 13(1)(a) of that Act. Group 1 asked for registration plus scale. Group 2 asks only for registration.

So an entity that is registered under NGER but sat comfortably below the Group 1 emissions threshold, and nowhere near $200 million of revenue, is in scope for financial years commencing on or from 1 July 2026. It is in scope on the strength of a registration it already holds for a different purpose, under a different Act, administered by a different regulator.

This is the single most common way a company discovers it is a Group 2 entity later than it should have. The finance team models the size thresholds, concludes it is Group 3, and nobody checks the NGER register.

RG 280 also warns against treating the question as settled at the start of the year. The requirements crystallise at the end of the financial year, so an acquisition, a restructure or a shift in conditions can change reporting status mid-year. The guidance expects entities to have systems that detect this, not to discover it in August.

What the shield actually protects

Under the modified liability settings, no legal action other than criminal action, or action by ASIC, can be brought against a person in relation to protected statements made in the sustainability report, or in the auditor’s report on it.

That is a strong protection and a narrow one at the same time. Private litigation is off the table. An investor cannot sue over a protected statement. ASIC can still act, and criminal liability is untouched. Directors are inside the definition of “person” here.

What makes it narrow is the definition of “protected statement”, and the fact that there are two different categories with two different expiry dates.

The first category is a statement relating to climate that, at the time it is made, is about the future. Its modified liability period covers reports prepared for financial years commencing between 1 January 2025 and 31 December 2025.

The second category is a statement about scope 3 greenhouse gas emissions, scenario analysis, or a transition plan. Its period covers reports prepared for financial years commencing between 1 January 2025 and 31 December 2027.

Both categories only apply to statements made in the sustainability report for the purpose of complying with a sustainability standard, or in the auditor’s report for the purpose of complying with the Corporations Act or the auditing standards. Voluntary disclosure that goes beyond what the standards require is not protected.

Run the dates

Group 2’s earliest in-scope financial year commences 1 July 2026.

The broad protection, for forward-looking climate statements generally, covers financial years commencing up to 31 December 2025.

1 July 2026 is after 31 December 2025. No Group 2 report falls inside the first category’s window. This cohort never held the broad shield at all, and nothing it files will be covered by it.

That is arithmetic on two published date ranges rather than a statement ASIC makes in those words, but it is not a close call, and it is the practical fact a Group 2 preparer needs before drafting.

What Group 2 does hold is the second category, and the amount of it depends on year-end. An entity with a 30 June year-end has a first in-scope year commencing 1 July 2026 and a second commencing 1 July 2027. Both fall on or before 31 December 2027, so both reports carry protection for scope 3, scenario analysis and transition plan statements. The third report, for the year commencing 1 July 2028, carries none.

An entity with a 31 December year-end has a first in-scope year commencing 1 January 2027, protected, and a second commencing 1 January 2028, which is outside the window. One protected report, not two.

Two Group 2 entities with the same size, same sector and same disclosures therefore have different litigation exposure, decided by their balance date.

What follows for the drafting

The practical consequence is that the protected and unprotected parts of a Group 2 report are different paragraphs in the same document, and they should not be written to the same standard of hedging.

Scope 3 figures, scenario analysis and the transition plan carry protection, including statements about the inputs and assumptions behind them. RG 280 is explicit that the assumptions travel with the disclosure. That is the part of the report where an honest, specific, well-documented estimate is the right answer, because a private action over it is not available.

A forward-looking climate statement that is not about scope 3, scenario analysis or a transition plan carries no protection for this cohort. Targets, expected financial effects, and forward statements about climate resilience outside the scenario analysis sit in ordinary liability. They need the ordinary discipline: a documented basis, stated assumptions, and a reasonable-grounds record contemporaneous with the statement.

Both halves rest on the same thing, which is whether the underlying data can be produced, sourced and defended on request. Protection from private action is not protection from ASIC, and it is not an audit opinion.

Four questions before the first Group 2 report

Are you on the NGER register, or required to apply under section 12(1), regardless of your size?

Does your balance date give you two protected reports or one?

Which statements in your draft are scope 3, scenario analysis or transition plan statements, and which are forward-looking climate statements of another kind?

For the second set, can you show the basis for each on the day you made it?

Socious Report takes one dataset and drafts CSRD, SSBJ and ISSB reports from it, with an independent Socious Verify credential on the result. AASB S2 is built on the ISSB standards, so the same climate dataset answers an Australian filing and a Japanese or European one. If you want to see where your data stands, start with our ISSB reporting overview.