Australia is part of a wave of jurisdictions adopting ISSB-informed climate disclosure standards. The Australian Sustainability Reporting Standards (ASRS) are designed to provide consistent, comparable, and verifiable information about companies’ climate risk exposure and management. They align closely with ISSB’s IFRS S1 and S2, with a few key differences.
Today, countries worldwide are implementing climate disclosure regulations that follow a framework set forth by the International Sustainability Standards Board (ISSB). Australia is one such jurisdiction. Below, we’ll take a look at : What they require, who is in scope, and how they align with (and differ from) ISSB’s guidance.?
What are the ISSB Standards??
Two standards, IFRS S1 and IFRS S2, were designed to create a global baseline for climate disclosure.
On June 26, 2023, the International Sustainability Standards Board (ISSB) finalized two climate disclosure standards—General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related Disclosures (IFRS S2). This marked a turning point in climate disclosure. Since the standards were introduced, more than 30 jurisdictions have partially or fully adopted the standards, or are in the process of doing so.??
The standards are built on fundamental recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD), which have shaped climate reporting practices and regulations over the past decade. IFRS S1 and S2 draw on other well-known standards, including those from the Climate Disclosure Standards Board (CDSB) and the Sustainability Accounting Standards Board (SASB). They also provide options for companies to integrate disclosures based on the European Sustainability Reporting Standards (ESRS) and the Global Reporting Initiative (GRI), as long as those disclosures are designed to meet investor needs.
The ISSB is an independent standard setter—it does not impose requirements on any jurisdiction or company. Its standards are designed to serve the markets and to provide a structure for consistent and comparable regulations across borders.?
What are the Australian Sustainability Reporting Standards (ASRS)?
Two standards (AASB S1 and AASB S2) aim to provide comparable information about sustainability and climate-related financial risks.
In September of 2024, following an extensive public process, the Australian Accounting Standards Board (AASB) finalized the , which are designed to provide consistent, comparable, and verifiable information about companies’ climate risk exposure and management. The standards align with IFRS S1 and IFRS S2, with a few key differences.?
AASB S1 - Sustainability Disclosure
The first standard, AASB S1, is the Australian equivalent of IFRS S1 - General Requirements for Disclosure of Sustainability-related Financial Information. It provides a framework for companies to disclose information to investors about their sustainability-related risks and opportunities. AASB S1 is a voluntary standard that companies can elect to apply.?
AASB S2 - Climate Disclosure
The second standard is the Australian equivalent of IFRS S2 and provides a framework for disclosing information about climate-related risks and opportunities. It is a mandatory standard that requires compliance from certain companies under the Corporations Act of 2001.?
ASRS Stakeholder Process
- June 2023 – IFRS S1 and IFRS S2 issued by the ISSB?
- October 2023 – Exposure Draft ED SR1 Australian Sustainability Reporting Standards – Disclosure of Climate-related Financial Information published for 130-day comment period?
- October 2023 – March 2024 – Stakeholders provided extensive feedback to the AASB through survey responses, comment letters, and participation in virtual and in-person roundtables?
- April – September 2024 – Stakeholder feedback analyzed and 46 staff papers discussed across six public AASB meetings to decide the requirements and drafting of the ASRS?
- September 2024 – Final ASRS approved and published by the AASB
Who do the ASRSs apply to? What are the deadlines for reporting?
Disclosure deadlines are phased based on size and asset thresholds.
Climate-related financial reporting under AASB S2 will be required for entities that prepare financial reports under the Corporations Act of 2001 and meet certain criteria for size, asset thresholds, and National Greenhouse and Energy Reporting (NGER) registration.
Reporting is :?
Group 1: Annual reporting periods commencing on or after January 1, 2025?
A Ch 2M entity, other than a registered scheme, RSE, or retail CCIV, is required to prepare a sustainability report as part of the Group 1 reporting cohort if the entity (and the entities it controls, if any) meets at least two of three criteria:?
1. Consolidated revenue: A$500M or more;?
2. End of financial year consolidated gross assets: A$1B or more
3. End of financial year employees: 500 or more.?
4. Is a registered corporation under the NGER Act or is required to make an application to be registered under s12(1) of the NGER Act and is a member of a group that meets, for a financial year, the threshold in s13(1)(a) of the NGER Act.
Registered schemes, registrable superannuation entities (RSE), and retail corporate collective investment vehicles (CCIV) are excluded from Group 1 and should consider whether they are in the Group 2 or 3 reporting cohort.?
Group 2: Annual reporting periods commencing on or after July 1, 2026?
A Ch 2M entity is required to prepare a sustainability report as part of the Group 2 reporting cohort if it (and the entities it controls, if any) meets at least two of three criteria:?
1. Consolidated revenue: A$200M or more;?
2. End of financial year consolidated gross assets: A$500M or more;?
3. End of financial year employees: 250 or more. This may include companies, registered schemes, RSEs, and retail CCIVs.?
Group 3: Annual reporting periods commencing on or after July 1, 2027?
A Ch 2M entity is required to prepare a sustainability report if it (and the entities it controls, if any) meets at least two of these criteria:?
1. Consolidated revenue: A$50M or more;?
2. End of financial year consolidated gross assets: A$25M or more;?
3. End of financial year employees: 100 or more. This may include companies, registered schemes, RSEs, and retail CCIVs.
Voluntary Disclosures
Companies that are not in scope can elect to apply AASB S1 and/or AASB S2 voluntarily. If an entity voluntarily chooses to apply either or both standards, the entity must comply with all of the requirements in order to state compliance. The AASB does not mandate which entities must apply ASRS or when they must do so—this is determined by Australian legislation.
Is assurance required under Australia’s standards??
Mandatory climate reporting is subject to phased assurance requirements.
Australia has , developed by the Australian Auditing and Assurance Standards Board (AUASB).
In the first year of reporting, a limited assurance (review) is required over:
- Governance disclosures
- Strategy disclosures related to climate risks and opportunities
- Scope 1 and Scope 2 greenhouse gas emissions
- Any statement asserting that there are no material climate?related risks or opportunities
Over subsequent years, assurance requirements expand in scope and depth. Sustainability reports will be subject to full audit requirements for financial years commencing on or after 1 July 2030, aligning climate disclosures more closely with the rigor applied to financial statements.
How do Australia’s standards differ from ISSB??
Australia has taken a ‘climate first, but not only’ approach.
During the ASRS public feedback process, stakeholders generally supported the incorporation of the ISSB Standards’ requirements with minimal or no modifications, but wanted the regulations to take Australia-specific circumstances into consideration. As a result, the AASB made minor modifications to ISSB’s guidance.?
Australia has taken a ‘climate first, but not only’ approach, and does not require organizations to report on non-climate sustainability-related risks and opportunities. In addition, under Australia’s standards, companies do not have to provide industry-specific disclosures. Here’s a closer look at how Australia’s standards differ from the IFRSs:
AASB S1?
The voluntary provides the framework for any potential future expansion of topics beyond climate, as well as providing a basis for voluntary disclosures that extend beyond climate-related matters. The Australian Government has not announced a timeframe or a process for broadening mandatory sustainability reporting beyond climate. Changes include:
- Australian-specific paragraphs help clarify the voluntary status of AASB S1.?
- Some of the transition reliefs available under IFRS S1 have been modified or omitted due to the voluntary status of the standard.?
- A definition of users of a not-for-profit entity’s general purpose financial report.?
AASB S2?
The mandatory corresponds to IFRS S2 and focuses on climate-related risks and opportunities that could reasonably be expected to affect the reporting entity’s prospects. Modifications from ISSB include:
- An Australian-specific appendix detailing general requirements for the disclosure of climate-related financial information (drawn from the voluntary Standard AASB S1 but limited in scope to climate-related financial information only).?
- Options regarding consolidated reporting under the Australian legislation that requires sustainability reports.?
- Omission of requirements to consider and disclose industry-based information. The AASB intends to finalise mandatory requirements for industry-based disclosures by 2030.?
- A definition of users of a not-for-profit entity’s general purpose financial report.
How Should Companies Prepare for ASRS Climate Reporting?
With mandatory climate reporting already underway for large entities, and assurance requirements phasing in over time, companies in scope of Australia’s Sustainability Reporting Standards should focus on building durable, audit-ready reporting processes aligned with AASB S2.
1. Confirm Reporting Cohort and Reporting Deadlines
Preparation should begin with a clear determination of whether, and when, the entity is required to report under AASB S2. Companies should:
- Confirm cohort classification (Group 1, 2, or 3) based on revenue, asset, employee thresholds, and NGER registration
- Identify the first reporting period in which climate disclosures will be required
- Understand how group structures and controlled entities affect reporting obligations
This clarity allows organizations to align timelines, resourcing, and governance structures with regulatory expectations.
2. Establish ISSB-Aligned Climate Disclosure Foundations
Because AASB S2 closely aligns with IFRS S2, companies can leverage ISSB-based frameworks to prepare their disclosures. Key steps include:
- Identifying material climate-related risks and opportunities that could reasonably affect the entity’s prospects
- Documenting governance oversight, management responsibilities, and climate-related decision-making processes
- Aligning climate risk assessments with enterprise risk management and strategic planning processes
Early alignment helps ensure disclosures are decision-useful and internally consistent.
3. Strengthen Scope 1 and Scope 2 Emissions Data
Emissions data forms the backbone of Australia’s climate disclosure requirements. Companies should prioritize:
- Establishing consistent, well-documented methodologies for Scope 1 and Scope 2 emissions calculations
- Improving data quality, traceability, and controls in anticipation of assurance
- Assigning clear ownership for emissions data collection, review, and approval across sustainability, finance, and operations teams
Reliable emissions data support both regulatory compliance and broader risk and transition analysis.
4. Prepare for Phased Assurance Requirements
Australia’s assurance roadmap means climate disclosures will be subject to increasing scrutiny over time. To prepare, companies should:
- Treat climate disclosures with rigor comparable to financial reporting
- Document assumptions, estimates, and judgments used in climate-related reporting
- Begin internal readiness assessments to identify gaps ahead of limited assurance and future audit requirements
Proactive preparation reduces the risk of remediation under time pressure as assurance expectations expand.
5. Plan for Future Expansion Beyond Climate
While AASB S1 is voluntary, and mandatory reporting is currently limited to climate, companies should be aware that the ASRS framework is designed to support future expansion.?
In the meantime, organizations may wish to:
- Monitor regulatory signals related to broader sustainability reporting
- Build systems that can scale beyond climate-only disclosures
- Use voluntary application of AASB S1 strategically, where relevant to investors or stakeholders
This forward-looking approach helps future-proof reporting processes as global sustainability disclosure requirements evolve.
Australia Sets the Pace for ISSB Climate Reporting
Climate reporting is already underway in Australia. Companies preparing ISSB disclosures for other jurisdictions will be in a strong position to meet Australia’s requirements, but they should be aware of modifications and differences between the IFRSs and AASB S1 and S2, notably, the voluntary nature of sustainability reporting and the omission of industry-specific reporting requirements. Reliable, traceable, and transparent emissions data is the foundation for reporting under Australia’s law and should be a priority for in-scope organizations.?
