Australian Sustainability Reporting Standards (ASRS)

From 1 January 2025, the Australian Government requires businesses to begin reporting climate-related financial disclosures under the new Australian Sustainability Reporting Standards (ASRS).  

The mandated standard of reporting is referred to as ‘AASB-S2’ (Australian Accounting Standards Board – S2) and is derived from IFRS-S2 (International Financial Reporting Standards).  

This webpage summarises the new legislative changes, explaining the mandate and outlining how disclosures will be phased in over time. 

These changes mark a significant step in climate reporting standards and transparency, and the impacts of these standards will be different depending on the size of an organisation.  

• Certain companies will be required to make detailed disclosures about climate metrics and targets, along with climate risks and opportunities in line with the new standards.
• The standards will be rolled out over consecutive years according to “groups”, and each group has a 4-year ramp-up to full reporting and full assurance on disclosures. 
  • For Group 1 entities, the first financial year reporting period commences between January 2025 and June 2026.
  • For Group 2 entities, the first financial year reporting period commences between July 2026 and June 2027.
  • For Group 3 entities, the first financial year reporting period commences between July 2027 and June 2028.
• Disclosures must be made annually in a sustainability report and must be issued on the same date as financial reporting.
• As well as reporting on key metrics, companies will need to report on information derived from climate scenario analysis according to at least two specified scenarios, one of which must be aligned with the Paris Agreement, and the other a more extreme climate scenario.
• Even if an organisation doesn’t have reporting requirements, the reporting impacts will likely trickle through supply chains, as grouped entities begin to request information from suppliers. 

• Companies within Groups 1, 2 and 3 will need to develop the appropriate skills and competencies for incoming mandatory reporting requirements.
• Smaller organisations may need to build information on scopes of emissions (see image below) to prepare if their customers or suppliers fall within Groups 1, 2 or 3. Groups 1, 2 and 3 companies may begin requesting information from suppliers regarding emissions, climate risks, commitments to sustainability, and procurement and tender requirements.
• The Australian Accounting Standards Board have also formally voted to approve AASB S1 as a Voluntary Standard, which sets out general requirements for disclosing sustainability-related financial information. Companies can adopt this standard of reporting voluntarily to demonstrate leadership in sustainability reporting. 

Early preparation is essential to ensure that reporting requirements are met and prepared for assurance in future periods. Staying informed about reporting activities within your supply chain is also recommended, to anticipate the impacts of mandatory climate reporting to your business. 

See Treasury: Mandatory climate-related financial disclosures.  

See ASIC's interventions on greenwashing misconduct: 2023-2024.  

• Mandatory Climate Reporting (MCR) Services (pangolinassociates.com)
• The Edge Impact ASRS Readiness Assessment Guide | Edge Impact
• Australian Sustainability Reporting Standards online course (thinkific.com)