ASRS vs ISSB vs CSRD: how Australia's climate disclosure compares

Three frameworks, one direction

The Australian Sustainability Reporting Standards (ASRS), delivered through AASB S2, represent Australia’s mandatory climate disclosure regime. These standards are directly derived from the International Sustainability Standards Board’s (ISSB) global standards, specifically IFRS S1 and S2. This alignment ensures a degree of comparability with reporting frameworks used internationally. Businesses should use the climate reporting tier checker to determine their obligations.

CSRD, the EU’s Corporate Sustainability Reporting Directive, operates as a distinct framework. It utilises the European Sustainability Reporting Standards (ESRS) and encompasses a wider scope than the ASRS. While both regimes aim to enhance sustainability reporting, they differ in their specific requirements and reporting boundaries.

Ultimately, all three frameworks – ASRS, ISSB, and CSRD – share a common direction: to improve the quality and consistency of sustainability information available to investors and other stakeholders.

ASRS — the Australian regime

The Australian Sustainability Reporting Standards (ASRS) establish Australia’s mandatory climate disclosure regime. The standards require entities to report climate-related financial information. This includes disclosures relating to governance, strategy, risk management, and metrics and targets. Reporting extends to Scope 1, Scope 2, and a phased approach to Scope 3 emissions.

The ASRS are being implemented in phases, with requirements applying to different groups of entities based on their size. The largest entities are subject to the requirements first, followed by progressively smaller groups. Use the climate reporting tier checker to determine which group your organisation falls into and when your first report is due.

Entities should organise their reporting to align with the ASRS requirements. Recognise that the phased implementation means the specific disclosures and timelines will vary depending on the entity’s size and reporting tier.

ISSB — the global baseline

The International Sustainability Standards Board (ISSB) has developed two core standards: IFRS S1, which addresses general sustainability disclosures, and IFRS S2, which focuses specifically on climate-related disclosures. These standards are intended to provide a global baseline for sustainability reporting, and are being adopted or adapted by numerous jurisdictions worldwide.

Australia is recognising the ISSB standards as a key reference point for its own climate disclosure regime. The Australian Sustainability Reporting Standards (ASRS) are designed to align closely with IFRS S2.

However, the ASRS are not a direct copy of IFRS S2. They incorporate Australian-specific modifications and operate on a different implementation timeline to reflect the local context.

CSRD — the EU regime

The Corporate Sustainability Reporting Directive (CSRD) is the European Union’s framework for sustainability reporting. It represents a significant expansion of the previous Non-Financial Reporting Directive (NFRD). CSRD’s scope extends beyond climate-related disclosures to encompass a wide set of environmental, social and governance topics, assessed under a principle of ‘double materiality’. This means reporting must consider both the impact of the company on the world and the impact of the world on the company.

CSRD applies to large EU companies and also to certain non-EU companies that have significant activity within the EU. This includes subsidiaries or branches that meet certain thresholds related to revenue, employee numbers, or balance sheet totals.

Australian groups that operate with material EU operations may find themselves subject to both Australia’s ASRS requirements and the CSRD.