What is the modified liability period and what does it protect?

For financial years commencing between 1 January 2025 and 31 December 2027, statements in your sustainability report about Scope 3 emissions, scenario analysis and transition plans can only be actioned by ASIC or in criminal proceedings. Broader forward-looking climate statements had the same protection only for financial years commencing during 2025. Both windows are closed-ended and neither renews.

Are directors personally liable for climate disclosures?

Directors carry their ordinary care and diligence duties in relation to the sustainability report, and they sign a declaration about it. A temporary and partial protection applies to some forward-looking content, but it is narrower than it is usually described and it is closing. This is the one answer that should be read together with your own legal advice.

What does the board have to sign?

The directors' declaration in the sustainability report. For financial years commencing between 1 January 2025 and 31 December 2027, directors declare they have taken reasonable steps to ensure the report complies with the Corporations Act. From financial years commencing 1 January 2028, they declare their opinion that it does comply.

Glossary›AASB S2 disclosure requirements / AASB S2 mechanics›Transition plan (disclosure requirement)

Glossary term

Cluster C · C12

Tier 1

Transition plan (disclosure requirement)

Definition

A climate-related transition plan is an entity’s plan for responding to climate-related risks and opportunities, including any greenhouse gas emissions targets. AASB S2 does not require an entity to have one. It requires disclosure of the plan if the entity has one, including the assumptions it depends on and how it will be resourced.

AASB S2

· strategy and decision-making disclosures, paragraph 14(a)(iv) ·

In force

On this page

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

Cluster

C · AASB S2 disclosure requirements / AASB S2 mechanics, 25 terms

In practice

The distinction between having a plan and disclosing one is the practical point. An entity with no transition plan is not non-compliant. An entity with a plan that discloses only the headline target, without the assumptions, dependencies and resourcing behind it, is on weaker ground.

Directors should be aware that a published transition plan is a forward-looking statement with consequences. Statements about a transition plan are protected under section 1707D for financial years commencing 1 January 2025 to 31 December 2027 inclusive, but that protection is time-limited and does not extend to voluntary statements repeated elsewhere, such as in an investor presentation.

What the assurer does with it

The transition plan is disclosed under paragraph 14, which comes into review scope from the second reporting year when ASSA 5010 paragraph 10(b) extends the review to all disclosures.

The assurer tests whether the plan disclosed is the plan the entity actually has. They ask for the board or committee approval, the assumptions and dependencies register behind it, and the budget or capital plan that resources it. They accept a plan traceable to an approved document with stated assumptions and a funding line. They reject a transition plan described in the sustainability report that the board has not approved, a resourcing claim that appears in no budget, and a plan whose targets differ from the targets disclosed under paragraphs 33 to 36.

Commonly confused with

A climate-related target, which is the destination rather than the route. A target is disclosed under paragraphs 33 to 36; the plan for achieving it is disclosed under paragraph 14(a)(iv). Also confused with a requirement to have a plan, which AASB S2 does not impose.

Timing and relief

Statements about a transition plan fall inside the modified liability settings in section 1707D of the Corporations Act, which apply to financial years commencing between 1 January 2025 and 31 December 2027 inclusive. That protection is time-limited and ends with those periods, and it does not extend to the same statements repeated in voluntary material outside the sustainability report.