June 2025 ESG Policy Update—Australia

Australia is accelerating its ESG governance efforts. The Australian Securities and Investments Commission (ASIC) announced that starting from the 2025-26 financial year, large entities must comply with AASB S2 standards for mandatory climate-related disclosures. Sustainability reporting will now be a key focus in financial reporting and audits, driving greater transparency across the corporate sector.

Simultaneously, the Australian Sustainable Finance Institute (ASFI) has launched the country’s first Sustainable Finance Taxonomy, which uniquely includes high-emission sectors like mining and manufacturing. This framework aims to direct capital toward net-zero transition projects, with major financial institutions piloting its application.

In addition, the Australian government is considering the introduction of a Carbon Border Adjustment Mechanism (CBAM) to impose tariffs on carbon-intensive imports such as steel and cement. This move seeks to protect domestic industries, enhance trade competitiveness, and promote decarbonization in global supply chains. Collectively, these initiatives position Australia as a key player in sustainable finance and climate governance within the Asia-Pacific region.

https://www.klgates.com/June-2025-ESG-Policy-UpdateAustralia-7-23-2025