ASIC’s message for 2026 and beyond is clear: the easy wins on "greenwashing ads" were just the beginning; the next wave of enforcement is about whether businesses have prepared a sustainability report at all, and whether the numbers and statements can stand up to scrutiny. This increases the compliance risks for the 6,000 entities ASIC estimates have a disclosure obligation under recently introduced Australian Sustainability Reporting Standards (ASRS), AASB S1 and AASB S2.

Regulator update

In late 2025 ASIC announced its 2026 enforcement priorities, signalling a continued uplift in investigations and a shift away from an “intense focus” on greenwashing. The expanded focus follows several high‑profile greenwashing penalty cases in 2023–25 involving super funds and asset managers. For 2026, ASIC’s priorities now emphasise reporting and audit quality, failures to lodge required reports, and misleading or deficient financial and sustainability disclosures.

The shift

ASIC has made it explicit that it will administer and enforce the new mandatory climate reporting regime, treating the Sustainability Report as part of mainstream financial reporting misconduct. Regulatory Guide 280 and ASIC’s reporting and audit updates stress that enforcement is “more likely” where entities fail to prepare a sustainability report, lodge it late, or include incorrect, incomplete or misleading statements. In other words, the risk is no longer just a rogue marketing slide; it is a defective statutory report that brings serious consequences.

In response to a recent ruling partially in favour of ASIC (against Star Casino) by the Federal Court, ASIC’s Chair has shared that the regulator maintains a strong appetite for holding companies and their Directors accountable and that the regulator will continue to pursue such cases. Indeed, the Federal Government has bolstered ASIC’s agenda with successive increases in its FY24 and FY25 budget allocations for the explicit purpose of targeting greenwashing and other sustainability-related financial misconduct.

Protection – and its limits

The temporary “modified liability” settings apply to certain high‑uncertainty “protected statements” in sustainability reports (for example Scope 3 emissions, scenario analysis and transition plans). During this period, only ASIC or criminal authorities can bring actions in relation to those protected statements. You can read more about this in our ‘Reasonable Steps — Defining the Sustainability Report Director’s Declaration’ piece here.

However, the regime does not shield for:

• failures to lodge or prepare a sustainability report

• non‑protected statements, including many metrics that are commonly viewed as factual.

• sustainability claims made outside the report (investor decks, product disclosure, websites).

Avoiding the crosshairs

If you are a CFO, Company Secretary or director looking at your first sustainability report cycle, now is the moment to move sustainability reporting out of spreadsheets and email chains and into a controlled, auditable environment similar to your financials processes.

An API‑driven sustainability reporting platform gives you date‑stamped evidence of data lineage, automated controls over high‑risk metrics, and a clear governance trail you can point to when ASIC — or your auditor — asks, “What reasonable steps did you take? Why and how did you assess these risks?”

Instead of scrambling each year to reconcile inconsistent files and patch disclosure gaps, you can rely on a system that continuously ingests, validates and documents the quantitative and qualitative information that your statutory Sustainability Report is built on, reducing the risk of regulatory infringement and reputational damage.