Your AASB S2 readiness checklist for Australian mandatory climate-related disclosures
Group 3 captures companies with $50M+ revenue, $25M+ assets, or 100+ employees - bringing thousands more Australian businesses into mandatory climate reporting under the Australian Sustainability Reporting Standards (ASRS) from July 2027. Whether you’re reporting in full or claiming the materiality exemption, this free readiness assessment covers both pathways.
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.
You’re in Group 3 if you meet at least two of three size criteria below. These align with the thresholds for large proprietary companies under the Corporations Act.
Group 3 entities can opt out of full AASB S2 reporting if they determine there are no material climate-related financial risks or opportunities. This requires a formal materiality assessment documenting your reasoning.
⚠ Still required even with the exemption: A published statement, a directors’ declaration confirming the assessment, and an auditor’s report. Director liability still applies for misleading statements.
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.
Board and management oversight, directors’ duties, controls, and procedures for monitoring climate-related risks and opportunities. Includes skills assessment and reporting cadence.
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.
How climate-related risks are identified, assessed, prioritised, and integrated into your enterprise risk management framework.
Scope 1 & Scope 2 GHG emissions (Year 1), material Scope 3 emissions (Year 2), carbon accounting methodology, climate targets, and capital deployed.
Even if your entity claims the materiality exemption, Group 1 and Group 2 businesses in your supply chain are already requesting your energy data for their Scope 3 disclosures. Being able to produce clean electricity consumption and emissions figures isn't optional - it's becoming a commercial requirement.
For franchise operators, hospitality venues, childcare centres, and retail businesses, the pressure comes from both sides: regulatory obligations if you report in full, and supply chain data requests even if you don't. Either way, you need to know your Scope 2 emissions from purchased electricity.
Practical first step: Centralise all electricity billing data across your sites. Map NMIs to locations. Apply NGA emission factors for your state grid. Multi-site energy management platforms can do this automatically, even for smaller portfolios.
Covers both the full climate-related disclosure pathway and the materiality exemption pathway, with actionable steps for gap analysis, carbon accounting, and ESG readiness.
Critical milestones for Group 3 entities under Australia’s mandatory climate reporting regime.
Get the complete AASB S2 readiness assessment checklist covering both reporting pathways - full climate-related disclosures and the materiality exemption - with every step mapped out.
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