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Climate-focused scope
S2 zeroes in on climate-related disclosures.
AASB S2 explained
Climate-related disclosures for Australian reporters.
AASB S2 is Australia's mandatory climate disclosure standard, in force now. It requires climate-related financial disclosures from large entities in three phased groups from 1 January 2025: governance, strategy, risk management, and metrics and targets, including scenario analysis and Scope 1 to 3 emissions.
What is AASB S2?
AASB S2 Climate-related Disclosures is the Australian Sustainability Reporting Standard that makes climate reporting mandatory. Issued by the AASB in September 2024 and based on IFRS S2, it applies to large entities in three phased groups under the Corporations Act 2001, starting with annual reporting periods beginning on or after 1 January 2025. Entities report across four pillars: governance, strategy, risk management, and metrics and targets, including climate scenario analysis and Scope 1, 2 and material Scope 3 emissions.
Risk
Scenario analysis requirement
S2 requires qualitative or quantitative scenario analysis on climate-related risks.
GHG
Scope 3 greenhouse gas metrics
Relevant Scope 3 emissions categories must be disclosed if material.
What are the four pillars of AASB S2?
Governance. Board oversight and management’s role in climate-related risks and opportunities.
Strategy. How climate risks and opportunities affect business model, planning and financial position, tested through scenario analysis.
Risk management. How climate risks are identified, assessed and folded into the wider risk framework.
Metrics and targets. Scope 1, 2 and material Scope 3 emissions, climate targets and progress against them.
Why it matters
Who must report under AASB S2, and from when?
Three phased groups. Mandatory climate reporting is phased in under the Corporations Act 2001, based on entity size.
Group 1 reports first. Annual reporting periods beginning on or after 1 January 2025.
Groups 2 and 3 follow. From 1 July 2026 and 1 July 2027 respectively.
Check where you fall. The thresholds sit on consolidated revenue, gross assets and employees. Our applicability page works through them in a few minutes.
Scenario + governance
What does AASB S2 require for scenario analysis and governance?
- Map governance roles. Clarify board oversight, management responsibilities, and escalation paths.
- Choose climate scenarios. Select at least one scenario aligned with Paris Agreement pathways and one with higher warming.
- Assess resilience. Explain how the strategy holds up under each scenario and outline transition plans.
- Document risk management. Show how climate risks feed into enterprise risk systems and controls.
Measurement
What metrics and Scope 3 disclosures does AASB S2 require?
- GHG emissions. Report Scope 1, Scope 2, and relevant Scope 3 categories with methodologies.
- Climate-related metrics. Share internal carbon price, capital expenditure on climate projects, or financed emissions where relevant.
- Targets & progress. Describe climate targets, timelines, and performance against them.
- Risk management disclosures. Detail controls, thresholds, and triggers for climate-related risks and opportunities.
Actions to get ready for AASB S2
1. Check if it applies to you. Work through the thresholds and find your reporting group on the applicability page.
2. See where you stand. The readiness assessment scores your process in about three minutes.
3. See what you must disclose. The full AASB S2 disclosures checklist, with clauses and audit evidence.
4. Run the process. The CFO’s six-step operating guide, from the standard to an assurance-ready disclosure.
Glossary snapshot
AASB S2 glossary snapshot
Climate-related risks. Physical (acute/chronic) and transition risks that affect enterprise value.
Climate-related opportunities. Potential benefits from resource efficiency, new products, or markets.
Climate scenario analysis. Evaluating business resilience under different climate futures.
FAQs
AASB S2 explained FAQs
What is AASB S2?
AASB S2 Climate-related Disclosures is the Australian Sustainability Reporting Standard for climate-related financial disclosures. It was issued in September 2024, is based on IFRS S2, and is mandatory for large entities in phases from 1 January 2025.
Is AASB S2 mandatory?
Yes. Reporting is phased in under the Corporations Act 2001: Group 1 from annual reporting periods beginning on or after 1 January 2025, Group 2 from 1 July 2026, and Group 3 from 1 July 2027.
What are the four pillars of AASB S2?
Governance, strategy, risk management, and metrics and targets, mirroring the structure of IFRS S2 and the TCFD framework.
What climate scenarios does AASB S2 require?
At least one scenario aligned with the Paris Agreement’s ambition and one reflecting higher warming, used to test how resilient the strategy is under different climate futures.
Do we need to report Scope 3 emissions?
Yes, material Scope 3 categories, with transition relief: Scope 3 disclosures are not required in your first reporting year. Methodologies and assumptions must be documented.
How does AASB S2 relate to ASRS and AASB S1?
AASB S2 is the mandatory climate standard within the Australian Sustainability Reporting Standards (ASRS). AASB S1, which covers broader sustainability disclosures, is voluntary.
Every required disclosure, its clause and the audit evidence, written out in full.
See what AASB S2 actually asks for.
ESG 101 hub
Explore related topics
Australian Sustainability Reporting Standards overview
Understand the ASRS framework and who sets it.
AASB sustainability standards
See how the Australian Accounting Standards Board adapts IFRS Sustainability Disclosure Standards.
AASB S1 explainer
Get across general sustainability disclosure requirements.
Do I need to comply with AASB S2?
Work out whether your organisation falls into the Australian climate reporting cohorts.
AASB S2 disclosures checklist
Refresh the fundamentals before diving into ASRS specifics.
The CFO's ASRS reporting operating guide
Plan how you’ll collect the qualitative inputs ASRS expects.
