Guide · Updated 22 October 2026

What is a s296B no material climate risk statement?

Section 296B of the Corporations Act lets some Group 3 entities lodge a short climate statement instead of full disclosures. It is shorter to write, but it still has to be supported, approved and reviewed.

Published by Ransom Designs AU, the independent maker of the Group 3 Kit. Every rule is cited to a primary source listed at the end.

Short answer. If, for a financial year, an entity has no material financial risks and no material financial opportunities relating to climate, and it isn’t one of the larger or excluded entities, its climate statements can be two short statements: one saying so, and one explaining how that conclusion applies to the entity for that year (s296B(1)). Everything else that comes with a sustainability report still applies.

What the law says

Normally the climate statements in a sustainability report are the full disclosures required by AASB S2 (s296A(2)), covering governance, strategy, risk management, and metrics and targets (s296D(1)). Section 296B(1) changes that for some entities. Where, for a financial year, there are none of:

material financial risks relating to climate, and
material financial opportunities relating to climate,

the climate statements are (c) a statement of that circumstance, and (d) a statement explaining how it applies to the entity for the financial year (s296B(1)(c)–(d)). ASIC’s summary is the same: a statement that there are none, and a statement explaining how the entity determined that (ASIC guidance). Both limbs matter: no material risks and no material opportunities.

Who can use it

The statement isn’t available to an entity to which any of these apply for the year (s296B(1)(b)):

it meets two of: consolidated revenue of A$200m or more, consolidated gross assets of A$500m or more, or 250 or more employees (s296B(2));
it is registered under the NGER Act, or required to apply for registration (s296B(4));
it is a registered scheme, RSE or retail CCIV with assets of A$5 billion or more (s296B(5)).

Those are the Group 2 tests, so in practice the option is for Group 3. ASIC says entities may lodge under s296B(1) if they determine there are no material financial risks or opportunities relating to climate for the year and they are in “Group 3” (RG 280.74). Not sure where you sit? Read Am I a Group 3 entity? or run the free tester.

“Material” is decided under AASB S2

Whether there is a material climate-related risk or opportunity is worked out in accordance with the sustainability standards, which means AASB S2 (s296B(6); RG 280.75). Under AASB S2, information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that primary users of general purpose financial reports make on the basis of those reports (AASB S2 Appendix D para 18). The standard doesn’t set numerical thresholds; materiality judgements are specific to the entity (Appendix D para B19). Our step-by-step materiality guide covers how to do the assessment.

What the short statement doesn’t remove

Records. An entity that must prepare a sustainability report must keep written sustainability records, and keep them for 7 years after the report is completed (s286A(1)–(2)). Breaching this is an offence, including a strict liability offence (s286A(3)–(4)). ASIC lists “any assessment undertaken for the purposes of making the statement under s296B(1)” as a sustainability record (RG 280.51(g)).
Directors’ declaration. The sustainability report includes a directors’ declaration, made under a resolution of the directors, dated and signed by a director (s296A(1)(e), (7)). For financial years starting before 1 January 2028, directors declare whether the entity has taken reasonable steps to ensure the report complies; after that, whether it complies (s1707C; RG 280.58–280.59).
Assurance. In the first year of reporting, the auditor must review “any statement that there are no material risks or opportunities relating to climate and how that applies to the entity under s296B(1)(c) and (d)” (ASSA 5010 para 10(a)(iv)). A review is a limited assurance engagement (ASSA 5010 para 7).
ASIC can ask for the evidence. If ASIC considers a statement in a sustainability report incorrect, incomplete or misleading, it can direct the entity to explain it or give information or documents that substantiate it (s296E(1)).
Lodgement. The sustainability report is lodged with ASIC within 3 months of year end for disclosing entities, registered schemes and RSEs, and 4 months for others (s319(3); RG 280.7).

It is a yearly conclusion

For each year an entity lodges under s296B(1), ASIC says it must assess, in accordance with AASB S2, whether there are any material climate-related financial risks or opportunities, and keep adequate records to substantiate that assessment (RG 280.76). ASIC also expects entities to have robust processes ready to report in full in any later year where they find a material risk or opportunity (RG 280.77).

What ASIC has seen so far

ASIC reviewed 40 of the 312 sustainability reports lodged for years ending 31 December 2025. Two entities did not identify any climate-related risks or opportunities, and in both cases the auditor included an emphasis of matter paragraph drawing attention to that judgement. ASIC said it didn’t ask for sustainability records in that review, but intends to look at this area in more detail in future, and encouraged entities to keep adequate records of how they identified risks and opportunities (REP 839, pp. 6 and 10). Those were not s296B statements, but they show where attention will go.

There is no official how-to guide yet

No regulator has yet published guidance on how to prepare or assure a s296B statement. Treasury’s consultation on improving the efficiency of climate disclosures, open from 23 August to 5 October 2026, asked whether resources are needed on “practically applying the statement of ‘no material climate-related risks or opportunities’” and on providing assurance where an entity makes that statement (consultation paper, Proposal 2). Treasury noted that any further guidance would be for the relevant agency to consider. Until something is published, the safest course is to over-document.

What a well-supported explanation usually covers

The Act requires an explanation of how the conclusion applies to the entity, but doesn’t prescribe its contents. In our view, a reader or reviewer will look for:

the reporting entity and period covered, and the time horizons used;
the operations, sites and value chain considered;
the physical and transition risks and the opportunities identified, and why none was judged material;
the information used, including past weather events, and any combined or indirect effects considered;
who did the assessment, and how the board reviewed it.

This is our suggestion, not a legal checklist. Agree your approach with your auditor early.

Frequently asked questions

Does a s296B statement need to be audited?

It must be reviewed. In the first year of reporting, ASSA 5010 para 10(a)(iv) requires the auditor to review any s296B(1)(c)–(d) statement. Group 3’s second and third years are a review of all disclosures, and an audit applies from financial years starting on or after 1 July 2030 (ASSA 5010 para 10(b)–(c)).

Can a Group 2 entity use s296B?

No. Section 296B(1) doesn’t apply to entities caught by s296B(2), (4) or (5), which are the Group 2 size, NGER and asset-owner tests.

If we use s296B this year, can we use it next year?

Only if a fresh AASB S2 assessment for that year again finds no material climate-related risks or opportunities, and you are still eligible. ASIC expects the assessment and records every year (RG 280.76).

Is there an ASIC template for the statement?

No. As at 22 October 2026 there is no official template or guidance on preparing or assuring a s296B statement. Treasury consulted on whether such resources are needed.

Sources

Pinpoints in this guide: “s” is a section of the Corporations Act 2001; “reg” is a regulation of the Corporations Regulations 2001; “RG 280.x” is a paragraph of ASIC Regulatory Guide 280. All sources were opened and checked on 22 October 2026.

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General information only. This is not legal, accounting or assurance advice. The kit and this website don’t take account of your circumstances. Whether your entity has no material climate-related risks or opportunities depends on your own facts and the judgement of your directors. Confirm your approach with your auditor or adviser before relying on it. Using the kit doesn’t guarantee compliance or any audit outcome.

The 2026–27 Budget proposal to lift the thresholds to A$100m revenue and A$50m gross assets is proposed, not law. Law and sources last verified 22 October 2026.