AASB S2 Knowledge Hub

Australian Sustainability Reporting Standards (ASRS)—Frequently Asked Questions (FAQs)

• What are Australian Sustainability Reporting Standards?

  Australian Sustainability Reporting Standards (ASRS) consist of two Standards:

  1. AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information—based on IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information.
  2. AASB S2 Climate-related Disclosures—based on IFRS S2 Climate-related Disclosures.
• Is AASB S1 mandatory?

  No. AASB S1 is a voluntary Standard. Entities can elect to apply AASB S1 but are not required to do so.

• Is AASB S2 mandatory?

  AASB S2 is a mandatory Standard for certain entities to apply in accordance with requirements that are set out in the Corporations Act 2001.

• Why did the AASB issue AASB S2?

  The AASB issued AASB S2 to support the Australian Government’s decision to require certain large businesses and financial institutions to prepare climate-related financial disclosures.

  In September 2024, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 was passed, introducing mandatory climate-related financial disclosures for certain corporations and other entities through amendments to the Corporations Act 2001.

• How can I access AASB S1 and AASB S2?

  AASB S1 and AASB S2 are freely available and accessible via the:

  AASB Standards Portal

  You do not need to create an account to access the Standards. The two Standards are linked directly to the home page of the portal.

• Which entities are required to report using AASB S2?

  Under Chapter 2M of the Corporations Act 2001, entities must prepare a sustainability report:

  1. if they are required to prepare an annual financial report under Chapter 2M; and
  2. meet one of the sustainability reporting thresholds under s292A.

  Entities that meet the sustainability reporting thresholds under s292A include:

  • entities meeting at least two of three size criteria (based on revenue, assets and employees);
  • National Greenhouse and Energy Reporting (NGER) reporters; and
  • asset owners with value of assets above specified thresholds.

  Further details on the criteria can be found at the:

  Australian Securities and Investments Commission (ASIC) website

  The AASB develops the Standards but does not determine which entities are required to apply them.

• When are certain entities required to commence reporting using AASB S2?

  AASB S2 is mandatory for certain entities for annual reporting periods beginning on or after 1 January 2025. The timing of the first reporting period for which an entity must apply AASB S2 is phased into groups:

  • Group 1 entities: First annual reporting period beginning on or after 1 January 2025
  • Group 2 entities: First annual reporting period beginning on or after 1 July 2026
  • Group 3 entities: First annual reporting period beginning on or after 1 July 2027.

  Further details on the Group criteria can be found at the:

  ASIC website

  The Corporations Act 2001 (not the AASB) determines when entities are required to comply with AASB S2.

• What information needs to be disclosed to comply with AASB S2?

  AASB S2 requires entities to disclose information about climate-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance, or cost of capital over the short, medium or long term. The main climate-related financial disclosure requirements relate to governance, strategy, risk management, and metrics and targets, including information about scenario analysis and Scope 1, Scope 2 and Scope 3 greenhouse gas emissions. The Standard details particular disclosure requirements.

• How does AASB S1 compare to IFRS S1?

  AASB S1 is closely aligned with the global baseline of IFRS S1, which was issued by the International Sustainability Standards Board (ISSB) of the IFRS Foundation. They follow the same structure and contain substantively similar disclosure requirements.

  The AASB developed AASB S1 by incorporating the content of IFRS S1, including the IFRS paragraph numbering. The AASB modified the Standard to the extent necessary to take account of the Australian legal and institutional environment.

  The main differences between AASB S1 and IFRS S1 include:

  • AASB S1 is only a voluntary Standard; and
  • as AASB S1 is a voluntary Standard, some of the transition reliefs available in IFRS S1 have been modified or deleted.

  Further detail on differences between AASB S1 and IFRS S1 can be found in AASB S1 – see the section titled “Comparison with IFRS S1”.

• How does AASB S2 compare to IFRS S2?

  AASB S2 is closely aligned with the global baseline of IFRS S2, issued by the ISSB. They follow the same structure and contain substantively similar disclosure requirements.

  The AASB developed AASB S2 by incorporating the content of IFRS S2, including the IFRS paragraph numbering. The AASB modified the Standard to the extent necessary to take account of the Australian legal and institutional environment.

  Key differences between AASB S2 and IFRS S2 include:

  • AASB S2 includes Appendix D General requirements for disclosure of climate-related financial information. This Appendix incorporates general requirements drawn from AASB S1 related to the disclosure of climate-related financial information that the AASB considered necessary to enable AASB S2 to function as a standalone mandatory Standard for climate-related disclosures. The general requirements include the conceptual foundations for reporting such information, the location of disclosures, the timing of reporting and disclosures relating to judgements, uncertainties and errors;
  • under s292A(2) of the Corporations Act 2001, a parent entity can prepare a sustainability report for either the consolidated entity or the parent entity. Accordingly, requirements set out in Appendix D of AASB S2 have been modified to specify that an entity’s climate-related financial disclosures shall be for the same reporting entity as the related financial statements unless otherwise permitted by law; and
  • AASB S2 does not include requirements for entities to refer to and consider industry-based information or to disclose industry-based metrics.

  Further detail on differences between AASB S2 and IFRS S2 can be found in AASB S2 – see the section titled “Comparison with IFRS S2”.

• My entity is not captured under the Corporations Act 2001 climate reporting mandate. Can we still apply the ASRS?

  Entities can elect to voluntarily apply AASB S1 and/or AASB S2.

  If an entity voluntarily chooses to apply either or both Standards, they must comply with all requirements in the Standard(s) to claim compliance with the Standard(s).

  Any discussions with AASB staff members or by the Advisory Panel are not a substitute for seeking paid professional advice.

• Will audit or assurance be required for disclosures made under AASB S2?

  The AASB does not develop, issue or maintain auditing or assurance Standards.

  The Australian Auditing and Assurance Standards Board (AUASB) is responsible for developing assurance requirements for sustainability reports and the timetable for phasing them in. AUASB website The AUASB website contains further information about these developments, including links to the Standards ASSA 5000 General Requirements for Sustainability Assurance Engagements and ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001

• Who is monitoring compliance with the ASRS?

  The AASB is not responsible for enforcing mandatory ASRS; this is the responsibility of ASIC. Further details about compliance can be found on the ASIC Website

• Is my entity required to lodge digital climate reports or sustainability reports?

  Digital tagging in reporting is a voluntary practice in Australia at present. Entities can voluntarily choose to lodge digital financial reports with ASIC, but there is no requirement to do so. The AASB is unaware of any current plans to require companies to digitally tag climate-related financial disclosures made in accordance with ASRS Standards, although this situation could change in the future.