ESG compliance in Australia: a guide for SMEs
Australia has introduced mandatory climate-related financial disclosures through the Australian Sustainability Reporting Standards (ASRS), and the Modern Slavery Act creates supply chain due diligence obligations. Australian SMEs supplying large corporates or exporting to the EU and UK face growing ESG data demands.
Educational content only. The information on this page is provided for general awareness and does not constitute legal, financial, or professional advice. Regulatory requirements vary by jurisdiction, company structure, and sector. Always consult a qualified adviser before making compliance decisions.
The regulatory landscape
- Australian Sustainability Reporting Standards (ASRS) — mandatory climate reporting aligned with ISSB standards. Large companies (>$500M revenue or >$1B assets) must report from FY2025, mid-sized companies from FY2026, and smaller companies from FY2027. Scope 3 reporting (which includes supply chain data) is required from year one for large companies.
- Modern Slavery Act 2018 (Cth) — requires entities with >$100M annual consolidated revenue to report annually on modern slavery risks in their operations and supply chains. This is one of the most comprehensive modern slavery frameworks globally.
- ACCC Greenwashing Guidance — the Australian Competition and Consumer Commission has issued guidance on misleading environmental claims. Enforcement action is increasing.
- ASX Corporate Governance Principles — ASX-listed companies are expected to disclose their approach to environmental and social risks, creating pressure on their supply chains.
Supply chain obligations
If you supply to a company with >$100M revenue, they are likely subject to the Modern Slavery Act and will ask you to complete a supplier questionnaire about your labour practices, sourcing, and risk management. ASRS Scope 3 requirements mean large Australian companies will also request emissions data from suppliers.
Australian businesses exporting to the EU face CSRD supply chain obligations. Businesses supplying UK companies face UK SDS obligations. Both frameworks require Scope 3 emissions data from suppliers.
Trading with New Zealand
New Zealand has introduced mandatory climate reporting under the XRB (External Reporting Board) standards for large financial market participants and listed companies. Australian businesses supplying NZ companies should expect ESG data requests aligned with these standards, particularly around climate risk and emissions.
Practical priorities for Australian SMEs
If any of your customers have >$100M revenue, check whether they are subject to the Modern Slavery Act and prepare to respond to their supply chain questionnaires.
Review your marketing and environmental claims against ACCC greenwashing guidance. Enforcement is increasing.
Begin tracking Scope 1 and 2 emissions. Large customers subject to ASRS will request this data as part of their Scope 3 reporting from FY2026.
If you export to the EU or UK, prepare for CSRD and UK SDS supply chain questionnaires from your European customers.
Key resources
Manage your Australia ESG compliance
See how SolvingESG helps UK SMEs manage compliance continuously — without the consultant fees.