How do you run audit-ready scenario analysis under AASB S2?
A free guide for finance and sustainability teams working through mandatory climate disclosure. Covers the two scenarios AASB S2 requires, a repeatable method for rating climate risks across 2030, 2040 and 2050, and an honest read on where AI tools help and where they create audit risk.
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AASB Australia's Mandatory Climate Reporting
Trusted by Mandatory Reporters
“Trace’s AI capabilities have significantly streamlined our data collection and validation processes, reducing manual effort and giving us greater confidence .”
CFO, Allied credit
“Trace’s AI capabilities have significantly streamlined our data collection and validation processes, reducing manual effort and giving us greater confidence .”
CFO, Allied credit
“We’ve worked with Trace for over 4 years and they’ve always given us confidence that our carbon data is accurate, audit-ready and aligned with evolving reporting standards.”
CEO, EnVATO
" Starting early [with the Trace platform] meant we avoided the scramble - saving time, money, and a lot of stress"
HEAD OF ESG, PADDY PALLIN
Five chapters covering the complete scenario analysis method
The guide follows the sequence of a real AASB S2 engagement, from choosing your scenarios to ranking risks to stress-testing your AI use. Each chapter addresses a decision point where finance teams commonly stall.
What AASB S2 actually requires from scenario analysis
AASB S2 requires a minimum of two climate scenarios: one consistent with 1.5°C warming and one greater than 2.5°C. Risks must span physical and transition categories, cover short, medium and long-term horizons, and be expressed as financial effects, not narrative descriptions. This chapter sets out exactly what the standard demands and what auditors will test.
How to choose the right two scenarios for your business
The guide covers the two most commonly used scenario pairs: SSP1-RCP2.6 (a 1.5°C world of rapid decarbonisation and high transition risk) and SSP2-RCP4.5 (a 3°C world where physical risks compound across the century). It explains why each was chosen, what drives risk in each pathway, and how to document your selection so it holds under review.
Building a ranking framework that holds up to audit
Every risk in your register needs a likelihood and consequence rating across three time horizons, in both scenarios. The guide explains how to set consequence bands in dollar terms, why your climate risk framework must sit on the same scale as enterprise risk, and what limited assurance in year one actually rewards: a defensible, evidenced trail, not a perfect model.
The honest case on AI for scenario analysis
AI tools can summarise the standard, draft a first-pass risk list, and tighten narratives. They cannot identify which risks apply to your specific sites and supply chain, facilitate the workshop where ratings are agreed, or stand behind a materiality threshold when an auditor pushes back. This chapter explains exactly where AI is useful and where teams get into trouble by using it unsupervised.
Four things that catch finance teams off guard
These are the points that come up on every AASB S2 scenario analysis engagement. None of them are spelled out in the standard itself, which is part of why teams get caught.
Scenario analysis is where ASRS stops feeling like accounting
Most of AASB S2 rewards finance teams for what they already do well: gather data, document it, report consistently. Scenario analysis is different. It requires judgement about two versions of the future that have not happened yet, and that judgement has to be defensible to an auditor. Teams that treat it as a data exercise stall when they realise the standard does not tell them which scenarios to pick or how to rate exposure.
AI gives you a faster start and a worse finish
General AI tools are genuinely useful for explaining the standard and generating a first-pass risk list. The problem is that AI does not know your operations, so it produces risks that do not apply and misses the ones that do. An AI chat transcript is not assurance evidence. The teams who get value use AI inside a controlled, evidenced process, not instead of one.
Limited assurance rewards a defensible trail, not a perfect model
Year one assurance under AASB S2 does not require a perfect quantitative model. It requires evidence that someone decided who was responsible, what threshold counted as material, and why each risk was rated the way it was. Defining consequence bands in dollars turns each rating from an opinion into something an auditor can test.
Undisclosed risks still need to be documented
Setting a materiality threshold means some risks will not cross it. Those risks still need to be documented. Auditors want evidence that you considered the full list, not just the risks you chose to disclose. A well-maintained risk register that includes sub-threshold risks is one of the clearest signals of a defensible process.
Written for the people
making ASRS decisions
This ebook is written at CFO grade, with enough detail to be genuinely useful to sustainability leads and risk teams. Not a primer. Not a sales deck.
Responsible for signing off on the disclosure. Needs to understand what auditors will scrutinise in year two, and where the financial integration gaps are in first-round disclosures.
Building the disclosure internally. Needs to understand what peers are doing on Scope 3, scenario analysis and materiality so the internal benchmark is calibrated correctly.
Needs to understand where governance documentation is falling short in first-round disclosures and what auditors are already flagging as areas for year-two improvement.
Accountable for climate risk oversight under AASB S2. Needs a clear picture of what comparable entities are disclosing and what the governance standard looks like in practice.
This ebook is particularly relevant if:
Your entity is likely to fall under ASRS Group 1, 2 or 3 (or you're not yet sure which group applies)
Your board or audit committee has asked about climate disclosure obligations for the first time
You're preparing a Group 2 first disclosure and want to learn from what Group 1 entities got right and wrong
You need to brief internal stakeholders on what AASB S2 actually requires versus what others are choosing to include
From ebook to
compliant disclosure.
01
Download the ebook
Understand what first reporters did. Where they focused, where they struggled, and what auditors are already signalling for year two.
Get it now02
Run your readiness assessment
Trace maps your current data, governance and reporting position against ASRS requirements. You get a clear picture of where you are and a prioritised gap list.
See how it works03
Build your compliance roadmap
Trace turns your readiness assessment into a sequenced plan: what to do now, what to prepare for year two, and how to keep your board and audit committee informed throughout.
Book a call with our teamQuestions we hear most from ASRS teams
These are the questions Trace’s team hears most often from CFOs and sustainability leads starting their ASRS journey. The full ebook answers all of them in depth.
Questions we hear most from ASRS teams
These are the questions Trace’s team hears most often from CFOs and sustainability leads starting their ASRS journey. The full ebook answers all of them in depth.
Your deadline is coming.
Start with the data.
Download the free ebook and see what Australia’s first AASB S2 reporters have already disclosed. Then talk to Trace about where you stand.
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