The global push for sustainability has increased the demand for reliable Environmental, Social, and Governance (ESG) disclosures. With the mandatory adoption of AASB S2 in Australia, and AASB S1 expected to follow, identifying the challenges associated with sustainability reporting is critical. Therefore, this study conducts a systematic literature review of 61 peer-reviewed articles published between 2023 and 2025, selected using the PRISMA framework, to examine organisational, technical, and governance barriers in sustainability and climate-related reporting. Findings reveal three primary challenge categories: resource constraints, insufficient information and technical infrastructure, and organisational and cultural barriers. Key underlying factors include regulatory pressure, limited institutional and organisational capacity, inadequate data systems, assurance demands, and resistance to change. Understanding these challenges is essential for effective implementation of AASB S2 and preparing for future adoption of AASB S1, highlighting the need for organisational readiness, enhanced technical capabilities, and supportive regulatory frameworks to ensure high-quality and decision-useful sustainability reporting.