ASRS / AASB S2: who reports, when, and what it takes

Australia's mandatory climate reporting regime is no longer a future problem. Group 1 entities are already reporting. Group 2 is now in scope. Group 3 follows in 2027. The timeline above sets out who is captured, when, and through which pathway.

Who is captured

An entity with Chapter 2M financial reporting obligations under the Corporations Act 2001 (Cth) is captured when it meets at least one of three pathways:

1. The corporate size test — meet any two of three thresholds (consolidated revenue, gross assets, employees at year end).
2. The NGER pathway — registered or reporting under the National Greenhouse and Energy Reporting scheme.
3. The asset-owner pathway — registered schemes, registrable superannuation entities and retail CCIVs above the asset threshold.

Only one pathway needs to be triggered. This is where most boards get it wrong: an entity comfortably under the size test can still be captured because it is an NGER reporter, or because it is an asset owner.

The three groups

Group 1 — periods starting on or after 1 January 2025. Size test: $500m+ revenue, $1b+ gross assets, 500+ employees (meet two of three). NGER pathway: meets the NGER publication threshold. First report for a 30 June year-end entity: year ending 30 June 2026. These entities are in reporting now.

Group 2 — periods starting on or after 1 July 2026. Size test: $200m+ revenue, $500m+ gross assets, 250+ employees. NGER pathway: all other NGER reporters. Asset-owner pathway: $5b+ in consolidated assets. First report for a 30 June year-end entity: year ending 30 June 2027. Group 2 is now in scope — the first reporting period has begun, which means the baseline data being captured today is the data that will be assured.

Group 3 — periods starting on or after 1 July 2027. Size test: $50m+ revenue, $25m+ gross assets, 100+ employees. First report for a 30 June year-end entity: year ending 30 June 2028.

Different financial year-ends produce different first reporting dates. The dates above are indicative for 30 June year-end entities.

What AASB S2 actually asks for

The disclosure architecture follows four pillars:

• Governance — board and management oversight of climate-related risks and opportunities, including how oversight responsibilities are assigned and how the board is skilled to exercise them.
• Strategy — material climate-related risks and opportunities, their effects on the business model and value chain, financial effects in the current period and anticipated effects, climate resilience assessed using scenario analysis, and a transition plan where one exists.
• Risk management — the processes used to identify, assess, prioritise and monitor climate risk, and how these integrate with enterprise risk management.
• Metrics and targets — Scope 1, 2 and 3 greenhouse gas emissions measured in accordance with the GHG Protocol, industry-based metrics, internal carbon prices, remuneration linkages, and targets with progress against them.

Scope 3 and scenario analysis carry phased relief in the first reporting year, but the relief is short. Building the data pipeline in year one is not optional preparation — it is the only way year two is deliverable.

Where entities are underestimating the work

From our diagnostic work across Australian entities, four gaps recur:

Scope 3 value-chain data. Supplier engagement, spend-based versus activity-based methods, and category prioritisation take twelve to eighteen months to mature. Starting when the relief expires is starting too late.

Scenario analysis that is decision-useful. A pair of generic warming pathways pasted into an appendix will not survive assurance. The analysis needs to be tied to real assets, real revenue lines and real capital decisions.

Governance evidence. AASB S2 asks how the board oversees climate. That answer must be visible in board papers, committee charters, minutes and skills matrices — not asserted in a disclosure.

Assurance readiness. Climate disclosures are subject to a phased assurance regime. Every number needs a documented source, method, control and owner. Spreadsheets without lineage will not pass.

Directors' duties and the safe harbour

The regime carries a modified liability framework for certain forward-looking statements — scenario analysis, transition plans and Scope 3 — in the early years. It is a limited window, not a permanent shield, and it does not displace directors' duties. Boards should treat the protected period as time to build defensible process, not as a reason to defer.

What to do in the next ninety days

1. Confirm your group and first reporting period. Test all three pathways against your actual year-end, not the calendar year.
2. Run a gap assessment against AASB S2. Pillar by pillar, disclosure by disclosure, with an owner assigned to each gap.
3. Baseline Scope 1 and 2, and map Scope 3 categories. Identify which categories are material and which data sources exist today.
4. Fix governance now. Assign board oversight, update the audit and risk committee charter, and start creating the paper trail.
5. Decide your transition plan position. If you have one, it must be disclosed against AASB S2 expectations. If you do not, be clear about that and about what comes next.

How ESG&I helps

We run an AASB S2 Diagnostic — a structured, evidence-based review across governance, strategy, risk management and metrics that produces a scored readiness position and a prioritised remediation roadmap. Where a transition plan is in scope, our Transition Plan Readiness assessment tests plan credibility against AASB and ASIC expectations.

If you are a Group 2 entity, your first reporting period has already started. The most valuable thing you can do this quarter is establish exactly how far you are from a report that will withstand assurance.

General information only. Current as at 14 August 2026. Source: Corporations Act 2001 (Cth), s 292A; ASIC Regulatory Guide 280.