Are Your Climate Targets ‘Green-Hushing’ Ready? ASIC’s View on Selective Disclosure
Australia’s climate reporting game just entered a new era. The rules are no longer simply about saying the right green things—they’re about what isn’t said, too. The Australian Securities and Investments Commission (ASIC) is signalling that silence on climate achievements and risks—so-called ‘green-hushing’—can mislead just as easily as exaggeration. With mandatory climate-related financial disclosures under AASB S2 beginning for large companies in 2025, the cost of under-communicating is about more than missed opportunities: it invites both regulatory and reputational heat.
What This Means for Australian Businesses
• “Just staying silent is no longer safe.” With ASIC’s enforcement framework, both over-claiming (greenwashing) and under-disclosing (green-hushing) are on notice.
• Stakeholder expectations—investors, boards, auditors—are rising. Silence, or selective disclosure, is now a high-risk strategy.
• A move from voluntary to mandatory climate reporting equates to financial-statement level scrutiny. That means audit trails, substantiated net zero claims, and integrated, reliable ESG data are the new baseline.
Understanding the Regulatory Shift: ASIC’s Expectations Set a New Bar
AASB S2 and Chapter 2M of the Corporations Act bring in phased mandatory sustainability reporting—starting with the largest entities in 2025 and extending to smaller groups by 2027. If your organisation is in Group 1 (revenue over $500 million, assets over $1 billion or 500+ staff), disclosure isn’t optional. It’s expected with the same rigour as financials.
This shift is more than a box to check:
• Sustainability reporting is subject to the same enforcement actions as financial reports – civil penalties, director disqualification, and even criminal sanctions for material breaches.
• ASIC’s Regulatory Guide 280 and the new AUASB assurance standards mean substance over form will be closely watched. Boilerplate language and selective numbers won’t pass audit muster. ASIC’s enforcement actions—including penalties and public naming—underscore what’s now at stake.
The Hidden Risk of Green-Hushing
Recent ASIC statements clarify that keeping quiet about material climate progress, goals, or risks—especially if motivated by defensive risk-aversion—exposes a company to the same accusations as over-enthusiastic “green” claims. Selective silence doesn’t just miss an opportunity—it actively risks misleading markets, customers and regulators. The risks are magnified by:
• A legal obligation under AASB S2 to disclose all material climate-related financial risks and opportunities, not just the good-news stories.
• Requirement for decision-useful information that links scenario analysis, targets, and transition plans to actual operational strategy.
• Emerging global evidence (South Pole’s Net Zero Report: 70% of sustainability-committed companies globally don’t publicly share climate goals) showing green-hushing is under increasing scrutiny.
Legal and Operational Ramifications
• Directors now face extended duties to consider climate risks as fundamental to company oversight. During the transition period, some legal safe-harbours exist—but only for a narrow subset of disclosure items and only for a few years.
• Civil penalties for climate reporting breaches already match those for financial reporting errors. The Vanguard Investments enforcement was just the beginning: ASIC is building a substantial track record in both greenwashing and green-hushing cases.
• Auditors and external assurance processes mean ESG data quality, traceability, and the existence of a ‘single source of truth’ will be tested—especially for Scope 3 (value chain) emissions.
Best Practice: Getting Beyond Defensive Compliance
Defensive silence might feel safe, but under current rules, it’s a liability. Here’s how leading teams are resetting their approach:
1. Treat climate data as financial data: Build controls around your ESG datasets, ensuring completeness, audit-readiness, and clarity on assumptions/methodology.
2. Cross-functional collaboration: Finance, operations, sustainability, and legal teams coordinate from the outset. Break down data silos—integrate ESG metrics into core planning and forecasting systems rather than bolt them on as an afterthought.
3. Substantiation over slogans: Only declare climate targets or net-zero claims that can be supported by business plans, investments, and scenario analysis.
4. Track and disclose Scope 3 emissions: Prepare for deep supply chain data engagement. Early adopters are gaining an advantage by working collaboratively with suppliers and customers to get reliable data.
5. Prepare your board and audit committee: Arm them with dashboards that mirror confidence levels in sustainability data. Train directors on the new governance obligations and legal risks tied to both over- and under-disclosure.
6. Automate and future-proof: Invest in digital reporting platforms that do more than just collect data—they verify, track provenance, and flag reconciliation issues before they become audit findings.
The Practical Payoff: Cost Certainty, Credibility and Market Confidence
The price of inaction is no longer just a regulatory fine: it is reputational loss, disgruntled investors, and a falling short in a globally competitive market. Companies that treat sustainability reporting as an exercise in risk minimisation miss opportunities for efficiency gains, better supplier partnerships, and enhanced brand trust.
Forward-looking businesses are achieving:
• Cost predictability by building processes that integrate sustainability reporting into existing financial operations—minimising manual errors and rework.
• Improved investor and board confidence via tangible, audit-ready dashboards and narrative that connects climate performance to strategic goals.
• Enhanced stakeholder trust—by communicating transparently, not only on climate wins but also on challenges and pathways ahead.
Conclusion: Time to Get Strategic, Not Just Compliant
The era of green-hushing has placed a spotlight on climate silence as an unseen risk. Australian regulators demand more than compliance—they expect integrated, actionable, and transparent reporting on climate risks and opportunities. AASB S2, combined with ASIC’s active enforcement and evolving global standards, raises the bar for directors, operations leaders, and sustainability managers alike. Now is the moment to build ESG data systems, governance, and reporting frameworks that withstand audit and drive genuine business value.
Start with robust data. Build collaboration across functions. Prepare for scrutiny—both internal and external. And above all, see transparency not merely as a compliance burden, but as a doorway to operational resilience, stakeholder confidence and market differentiation. In this new landscape, only those who move decisively—beyond defensive silence—will be positioned to lead.
