GROUP 1 - REPORTING NOW

Your AASB S2 deadline
has already arrived.

Q: What is AASB S2 and when does mandatory climate reporting begin?

AASB S2 Climate-related Disclosures is Australia’s mandatory standard for climate-related financial disclosures, part of the Australian Sustainability Reporting Standards (ASRS). It is aligned with IFRS S2 and built on the TCFD framework. Mandatory reporting began for Group 1 entities from 1 January 2025, with Group 2 following from 1 July 2026 and Group 3 from 1 July 2027.

Q: What’s the difference between AASB S1 and AASB S2?

AASB S2 is the mandatory standard covering climate-related disclosures only. AASB S1 is a voluntary standard covering broader sustainability-related risks and opportunities (e.g., biodiversity, social issues). Only AASB S2 is currently required by law under the Corporations Act.

Q: What are the penalties for non-compliance with AASB S2?

Non-compliance carries civil penalties mirroring those for financial reporting breaches under the Corporations Act. This includes director liability for misleading disclosures. ASIC has enforcement powers, though for the first 3 years, private enforcement actions for Scope 3, scenario analysis, and transition plan disclosures are limited to regulator-only (ASIC) action.

Q: Do I need to report Scope 3 greenhouse gas emissions immediately?

No. Scope 3 GHG emissions reporting is optional in your first reporting year. It becomes mandatory from your second reporting period. However, most organisations start value chain mapping and carbon accounting for Scope 3 in Year 1 to ensure they have credible data ready for Year 2 disclosure.

The complete compliance checklist for Australia’s mandatory climate-related financial disclosures

Australia’s mandatory climate reporting regime is now in force under the Australian Sustainability Reporting Standards (ASRS). If your organisation meets the Group 1 thresholds under AASB S2 - Australia’s equivalent of IFRS S2 - you’re required to prepare a sustainability report covering greenhouse gas emissions, climate governance, scenario analysis, and more.

40+

Checklist items

Step process

Disclosure pillars

Emission scopes

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⏰ Group 1 entities with a 30 June FY - your first sustainability report is due by September–October 2026. Directors face personal liability for non-compliant climate-related financial disclosures.

What is AASB S2?

AASB S2 Climate-related Disclosures is Australia’s mandatory standard for climate-related financial disclosures, embedded in the Corporations Act 2001. It is part of the Australian Sustainability Reporting Standards (ASRS) and is closely aligned with the global baseline set by IFRS S2, issued by the International Sustainability Standards Board. Built on the TCFD framework, it requires in-scope entities to prepare an annual sustainability report disclosing climate-related risks and opportunities - including greenhouse gas (GHG) emissions, scenario analysis, climate governance, and transition plans. Non-compliance carries civil penalties and director liability under the Corporations Act.

Who this applies to

Group 1 Thresholds

You’re in Group 1 if you meet at least two of three size criteria, OR meet the NGER publication threshold. Entities must report under Chapter 2M of the Corporations Act.

Revenue

≥ $500 million

Gross Assets

≥ $1 billion

Employees

> 500

NGER

Meets publication threshold

First Period

FY beginning on or after 1 Jan 2025

What you must disclose

The Four Pillars of AASB S2

Climate-related disclosures under AASB S2 are structured around four pillars, aligned with the TCFD framework. All four must be addressed in your sustainability report, lodged with ASIC.

🏛

Climate Governance

Board and management oversight, directors’ duties, controls, and procedures for monitoring climate-related risks and opportunities. Includes skills assessment and reporting cadence.

🧭

Climate Strategy

Material climate risks, scenario analysis under 1.5°C and >2°C warming pathways, anticipated financial effects, and climate transition plans aligned with net zero targets.

🛡

Risk Management

How climate-related risks are identified, assessed, prioritised, and integrated into your enterprise risk management framework.

📊

Metrics & Targets

Scope 1 & Scope 2 GHG emissions (Year 1), material Scope 3 emissions (Year 2), carbon accounting methodology, climate targets, and capital deployed.

The operational challenge

Scope 2: why your energy data is the hardest part

You're reporting now. With 500+ employees, your organisation likely operates dozens of sites across multiple states, with electricity contracts spread across multiple retailers. For AASB S2, every kilowatt-hour needs to be captured, mapped to the correct NMI, and converted to CO₂-e using state-specific emission factors - and your auditor needs to see the trail.

For franchise groups, national hospitality chains, and multi-site retailers, Scope 2 is where the data problem hits hardest. Bills from AGL, Origin, and EnergyAustralia arrive in different formats, on different cycles, to different people. Manual consolidation doesn't scale - and it won't survive assurance.

What you need: NMI-level electricity consumption from every site, state-specific NGA grid emission factors applied correctly, CO₂-e disaggregated by location, and a documented methodology your auditor can follow. Multi-site energy management platforms can automate this across your entire portfolio.

Inside the checklist

What you’ll get

A step-by-step readiness assessment covering every AASB S2 disclosure requirement - from carbon accounting and GHG emissions to climate governance and ASIC lodgement.

AASB S2 Compliance Readiness Checklist - Group 1

40+ items

Confirm Chapter 2M status under the Corporations Act - Verify you prepare financial reports and assess your entity against Group 1 thresholds

Assign board responsibility for climate governance - Identify committees, document directors’ duties and climate competency requirements

Identify all Scope 1 and Scope 2 GHG emission sources - Direct emissions, purchased electricity - using location-based carbon accounting methodology

Begin Scope 3 value chain mapping - Start carbon footprint analysis across your supply chain ahead of mandatory Year 2 disclosure

Select scenario analysis pathways - 1.5°C and >2°C warming scenarios addressing transition and physical climate risks

Engage your auditor for sustainability assurance - Same audit firm as financial statements - limited assurance required from Year 1

+ 34 more items covering risk management, transition plans, emission factors, net zero targets, and ASIC lodgement...

Key dates

Your Group 1 Timeline

Critical milestones for Group 1 entities under Australia’s mandatory climate reporting regime.

1 JAN 2025

First reporting period begins

Mandatory climate-related disclosures are now live for Group 1 entities

30 JUN 2026

First FY ends (for Jul–Jun entities)

Scope 1 & 2 GHG emissions data must be collected for this full period

SEP–OCT 2026

First sustainability report due to ASIC

Lodge within 3 months (disclosing entities) or 4 months (others) after FY end

YEAR 2 (FY27)

Scope 3 emissions become mandatory

Material value chain greenhouse gas emissions must now be disclosed

1 JUL 2030

Reasonable assurance required

Full reasonable assurance across all climate-related financial disclosures

Frequently Asked Questions

What is AASB S2 and when does mandatory climate reporting begin?

AASB S2 Climate-related Disclosures is Australia’s mandatory standard for climate-related financial disclosures, part of the Australian Sustainability Reporting Standards (ASRS). It is aligned with IFRS S2 and built on the TCFD framework. Mandatory reporting began for Group 1 entities from 1 January 2025, with Group 2 following from 1 July 2026 and Group 3 from 1 July 2027.

What’s the difference between AASB S1 and AASB S2?

AASB S2 is the mandatory standard covering climate-related disclosures only. AASB S1 is a voluntary standard covering broader sustainability-related risks and opportunities (e.g., biodiversity, social issues). Only AASB S2 is currently required by law under the Corporations Act.

What are the penalties for non-compliance with AASB S2?

Non-compliance carries civil penalties mirroring those for financial reporting breaches under the Corporations Act. This includes director liability for misleading disclosures. ASIC has enforcement powers, though for the first 3 years, private enforcement actions for Scope 3, scenario analysis, and transition plan disclosures are limited to regulator-only (ASIC) action.

Do I need to report Scope 3 greenhouse gas emissions immediately?

No. Scope 3 GHG emissions reporting is optional in your first reporting year. It becomes mandatory from your second reporting period. However, most organisations start value chain mapping and carbon accounting for Scope 3 in Year 1 to ensure they have credible data ready for Year 2 disclosure.

When is the first Group 1 sustainability report due to ASIC?

For Group 1 entities with a 30 June financial year-end, the first sustainability report covering FY ending 30 June 2026 is due within 3 months (disclosing entities) or 4 months (other entities) after FY end - meaning September or October 2026 at the latest.

Get the free AASB S2
readiness assessment checklist

40+ actionable items covering climate-related disclosures, GHG emissions across all three scopes, scenario analysis, climate governance, and ASIC lodgement deadlines.