What ASIC’s first sustainability reporting findings mean for super funds

On 18 May 2026, ASIC published its early observations on the first sustainability reports lodged under Australia’s mandatory climate disclosure regime. The reports it reviewed came from Group 1 entities – the country’s largest companies, with December 2025 year-ends – not from superannuation funds. But for super funds, that timing is the point. 

Most large super funds sit in Group 2 and will report for the first time for financial years beginning on or after 1 July 2026. ASIC has effectively handed you a worked example of what it is looking for, with a full reporting cycle still ahead of you to act on it. The regulator was clear that its review will continue and that it may engage directly with entities about their disclosures, with final observations due in the second half of 2026.

ASIC made six observations in total. Three of them go to the heart of how a super fund will need to construct its climate disclosures, and they are worth understanding now rather than in mid-2026.

 

1. Use the climate information you already hold

ASIC reminded entities that the “reasonable and supportable” information available to identify climate-related risks includes information about past events, current conditions and forecast future conditions. That phrasing comes straight from AASB S2.

The finding behind it is pointed. ASIC saw cases where an entity had already disclosed – in prior financial reports or in announcements to the ASX – that its assets or operations had been financially affected by extreme weather events, yet had not gone on to identify or disclose similar risks to its prospects over the short, medium or long term, nor any related mitigation.

For a super fund, the parallel is direct. You hold a great deal of decision-useful information already: portfolio exposure data, the outcomes of engagement with investee companies, and the historical performance of climate-sensitive sectors you are invested in. ASIC’s expectation is that this information feeds your forward-looking risk assessment. Stating that the fund “considers climate risk” is not enough if the evidence you already have is not visibly informing what you disclose.

 

2. Make your judgements and assumptions clear, effective and proximate

Of the three, this is likely to be the most demanding for super funds, and it is where ASIC was most specific.

The regulator wants disclosure of judgements, assumptions and areas of measurement uncertainty to be “clear, effective and proximate.” In its review, it saw entities disclosing forward-looking information in a way that left users to draw their own conclusions about why something had been included or presented as it was – for example, how the entity had applied the proportionality mechanisms permitted under AASB S2.

Super funds will face this constantly. When you explain how you identify material climate risks across a portfolio without necessarily publishing financed-emissions figures for every holding, the reasoning has to be visible. Why are certain sectors treated as higher risk? What time horizons are you using, and why? Why have you concluded a particular risk is not material? “Proximate” matters here: ASIC’s point is that the explanation should sit alongside the disclosure it supports, so a member can follow the basis for the conclusion without hunting through an appendix to reconstruct it.

 

3. Don’t let voluntary content obscure the mandatory disclosures

Many super funds already publish detailed voluntary climate reports, and that habit creates a specific risk under the new regime.

ASIC observed reports where material climate information required under AASB S2 was not clearly distinguishable from additional, voluntary climate content. Its position is that supplementary information can be useful – and is sometimes necessary for a fair presentation – but it must not obscure the material financial information the standard requires. The required governance, strategy and risk management disclosures need to be prominent and easy to find.

ASIC’s suggested remedy is practical: index tables that set out where the required information sits within the report. For a fund moving from a polished voluntary report to a mandatory one, the discipline is to make sure the regulated core is unmistakable, not folded into the surrounding narrative.

 

What to do with the next twelve months

The throughline across all three observations is the same. ASIC is asking entities to show their work – to use the data they have, to explain the judgements they have made, and to make the required content easy to find. None of that is satisfied by a well-designed report that asserts conclusions without evidencing them.

Super funds have an advantage their Group 1 counterparts did not: a full cycle of hindsight before the first mandatory report is due. The funds that use it to build the underlying data and reasoning – rather than treating disclosure as a drafting exercise at the end – will be the ones whose first reports hold up to ASIC’s scrutiny.

Pathzero is the single source of truth for portfolio climate data, helping institutional investors identify, measure and disclose climate risk across private and public markets. If you’re preparing for your first AASB S2 reporting period, we’d be glad to talk.