AASB S2 first-cycle live
Climate Disclosure hub
Mandatory climate-related financial disclosures under AASB S2 are in force for Group 1 reporters from FY25. Scope 1+2 from year 1; Scope 3 from year 2; reasonable assurance by FY30.
Australia's mandatory climate disclosure regime, introduced by Treasury Laws Amendment (Financial Markets, Sustainability and Other Measures) Act 2024, requires entities to make climate-related financial disclosures in their annual report under Australian Sustainability Reporting Standard AASB S2.
Group 1 (large entities + NGER reporters): FY25 commencement. Group 2: FY27. Group 3: FY28. The framework follows ISSB IFRS S2 with Australian adaptations. Scope 1 + 2 emissions disclosed from year 1; Scope 3 from year 2; limited assurance over Scope 1+2 from year 1, escalating to reasonable assurance over all greenhouse gas emissions by FY30.
On top: Safeguard Mechanism baseline declining 4.9% pa for the 215 largest emitters; NGER reporting threshold-triggered; ACCUs as the carbon offset currency; ASIC + AASB joint enforcement program for greenwashing.
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Key obligations
Lodge mandatory climate-related financial disclosures (ASRS S2)
Group 1/2/3 entities must publish ASRS-aligned climate disclosures with their annual financial reports.
AASB S2 Scope 3 emissions + assurance phase-in
Group 1 entities must report Scope 3 from year 2 + escalating assurance through to FY30.
NGER reporting (Clean Energy Regulator)
Threshold-triggered annual emissions, energy production + consumption reporting.
Safeguard Mechanism baseline decline 4.9% pa
Australia's 215 largest emitters face declining baselines under Safeguard Mechanism reform.
Climate scenario analysis (AASB S2)
S2 mandates climate scenario analysis at least 1.5°C-aligned + an additional scenario.
Regulators
FAQ
Am I a Group 1 reporter?
Yes if you're a large entity (meeting 2 of 3 thresholds: $500M revenue, $1B assets, 500 employees), OR an NGER reporter, OR a financial institution above the asset threshold. Australian-incorporated entities and foreign entities with significant Australian operations both in scope.
What's AASB S2?
Australian Sustainability Reporting Standard S2 — Climate-related Disclosures. Substantively aligned with IFRS S2 (ISSB). Requires disclosure across governance, strategy, risk management, and metrics + targets. Published as part of annual financial report.
What's Scope 3?
Indirect emissions from value chain activities not in Scope 1 (direct) or Scope 2 (purchased energy). 15 categories from upstream purchased goods to downstream end-use. For Group 1: required from year 2 onwards. Often dwarfs Scope 1+2 for service businesses.
What's the assurance timeline?
Year 1 (FY25 for Group 1): limited assurance over Scope 1+2 emissions and governance disclosures. Year 2 (FY26): adds Scope 3 to limited assurance. By FY30: reasonable assurance over all greenhouse gas emissions. Auditor's report appended to annual financial report.
What's the Safeguard Mechanism?
Australia's main industrial emissions reduction policy. Applies to facilities with Scope 1 emissions >100,000 tCO2-e/yr (215 facilities). Baselines decline 4.9% pa from 2023 baseline. Compliance via emission reductions or surrender of ACCUs (Australian Carbon Credit Units).
What about greenwashing?
ASIC + AASB are running an active enforcement program. Major cases: REST (2023), Active Super (2024), Mercer Super (2024). Sustainability claims in product disclosure statements + marketing must align with AASB S2 + have reasonable basis. Penalties up to $13.2M per false representation.
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