What are the thresholds for Group 1, Group 2 and Group 3?

Group 1 is two of $500 million revenue, $1 billion gross assets and 500 employees. Group 2 is two of $200 million, $500 million and 250 employees, and Group 3 is two of $50 million, $25 million and 100 employees. All figures are consolidated and you test them every year.

We just crossed the threshold this year. Do we report this year or next?

You test the thresholds for each financial year on its own. There is no grace year and no consecutive-year requirement. If you meet two of the three tests for this financial year and your group's start date has already passed, you report for this financial year.

We are a private company with no external shareholders. Are we still captured?

Yes, if you meet the tests. The regime is not limited to listed entities, so any entity that must lodge a financial report under Chapter 2M and meets a section 292A test is captured. That includes large proprietary companies, unlisted public companies and Australian subsidiaries of foreign groups.

Glossary›Regulation, capture and thresholds / Regulation, capture and timing›Group 3 entity

Glossary term

Cluster B · B4

Tier 1

Group 3 entity

Definition

A Group 3 entity is in the third cohort captured by Australia’s mandatory climate reporting regime and reports for annual reporting periods commencing on or after 1 July 2027. It meets two of three thresholds: consolidated revenue of $50 million or more, consolidated gross assets of $25 million or more, or 100 or more employees.

Corporations Act 2001

· sections 292A and 296B ·

In force

On this page

In practice
What the assurer does with it
Timing and relief
Sources
Related terms
Related questions

Cluster

B · Regulation, capture and thresholds / Regulation, capture and timing, 26 terms

In practice

Group 3 has a carve-out the other two groups do not. Under section 296B, if the directors conclude the entity has no material climate-related financial risks or opportunities, the climate statement may be a statement to that effect rather than a full set of AASB S2 disclosures. That is not a free pass. The conclusion is a directors’ judgement, it has to be supportable, and under ASSA 5010 the statement itself is subject to limited assurance in the first reporting year.

A proposed change is worth watching and is not law. The 2026-27 Federal Budget proposed increasing the financial reporting thresholds for large proprietary companies from $50 million to $100 million in consolidated revenue and from $25 million to $50 million in consolidated gross assets. Because section 292A only applies to entities required to lodge a financial report under Chapter 2M, proprietary companies that fall below the raised thresholds would no longer lodge a financial report and therefore would not lodge a sustainability report. The Government estimated around 1,500 private entities would come out of direct reporting obligations.

That is a Budget announcement, not law. It is subject to consultation and has not been drafted or enacted. It applies to proprietary companies only and does not change the AASB S2 requirements or the section 292A group thresholds themselves. This entry states the position as enacted. Re-check it at each content refresh, because amending legislation in this area has moved repeatedly.

What the assurer does with it

Where a Group 3 entity takes the section 296B route, the assurer does not simply accept the statement. Under ASSA 5010 the no-material-risk statement is itself within the year one limited assurance scope, so they test the process that produced it: what risks were considered, over what time horizons, against what evidence, who concluded, and whether the conclusion is consistent with everything else in the entity’s own records. They reject a statement supported only by a board resolution, and they reject one that sits alongside a business with obvious physical or transition exposure that the assessment does not mention.

Timing and relief

For a 30 June year end, a Group 3 entity’s first reporting period is the year commencing 1 July 2027 and ending 30 June 2028. The proposed increase to the large proprietary company thresholds announced in the 2026-27 Federal Budget is not law and has no commencement date; the current thresholds apply until it is enacted.