Reading the AASB's July 2026 Transition Planning Guidance — what it means for Australian reporters

In July 2026 the Australian Accounting Standards Board released Educational Material titled "Disclosing information about an entity''s climate-related transition, including information about transition plans, in accordance with AASB S2". It is non-normative — it does not add to the Standard — but it is now the reference point Australian Group 1, 2 and 3 reporters will be judged against by auditors, boards and investors.

For anyone preparing FY26 or FY27 climate disclosures, this document quietly resets the bar.

Why this matters

AASB S2 tells you what to disclose. The Transition Plan Taskforce (TPT) Disclosure Framework (now stewarded by the IFRS Foundation) tells you how a credible transition plan is structured. Until now, Australian preparers have had to bridge those two on their own.

This new guidance closes the gap. It maps AASB S2''s requirements directly to the components of a credible transition plan across three familiar pillars — Governance, Strategy, and Metrics & Targets — and includes worked examples across oil and gas, metals and mining, electric utilities, banking, asset management, asset owners, and food and beverage.

The concept boards should focus on: the "strategic goal"

The guidance introduces a single, powerful anchor: the strategic goal. It defines this as "a goal related to an entity''s transition towards a lower-carbon economy and/or climate-resilient economy."

Everything else — governance structures, business-model change, mitigation and adaptation levers, engagement, financial planning, metrics and targets — hangs off that strategic goal. If your board hasn''t formally endorsed one, the rest of your transition-plan disclosure won''t hold together.

What the guidance expects across the three pillars

Governance (paras 6–7) — Board oversight of the strategic goal, management''s role in delivering it, skills and competencies, and remuneration linkages.

Strategy (paras 8–19) — The strategic goal itself, business model and value chain changes, direct mitigation and adaptation efforts, indirect efforts (an engagement strategy), financial planning and effects, and the planned use of climate solutions.

Metrics & Targets (paras 20–37) — Cross-industry metrics (Scope 1, 2, 3), transition metrics, financial effects metrics, and climate-related targets — including how carbon credits are used.

Five things to do now

1. Formalise a strategic goal at board level, with scope, time horizon and interim milestones.
2. Map your business model and value chain — where does the transition actually land in operations, products, suppliers and customers?
3. Build a mitigation and adaptation register with owners, timelines, and capex/opex attached.
4. Design an engagement strategy — value chain, customers, industry, and policy. Passive silence is no longer defensible.
5. Quantify the financial effects — capex, opex, funding sources, revenue impact, and any planned use of carbon credits.

Where ESG&I can help

Our ASRS Readiness Assessment now includes a dedicated Transition Plan section mapped directly to this guidance. We''ve also released a new Transition Plan Readiness Sprint — a four-week engagement that delivers a board-ready transition plan disclosure aligned to AASB S2 paragraphs 6, 8, 9(c), 13, 15, 19, 29A and 36.

If your FY26 or FY27 disclosure is on the near horizon, this is the moment to move from intent to evidence.

Download the AASB''s Educational Material here.