ASRS S2 or AASB: What Does it mean & what does it involve?

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What is ASRS S2? 

ASRS S2 (Australian Sustainability Reporting Standards Standard 2) is Australia's mandatory climate reporting standard that requires eligible entities to disclose comprehensive information about climate-related risks and opportunities affecting their business operations, cash flows, financial position, and financial performance.

ASRSB S2 full name and meaning

• Full title: Australian Sustainability Reporting Standards Standard 2
• Common alternative reference: AASB S2 Climate-related Disclosures
• Status: Mandatory for eligible Australian entities from 2025-2027 (phased implementation)

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ASRS S2 requirements: what Australian companies must disclose

ASRS S2 mandates disclosure across four critical areas:

1. Governance - Climate oversight and accountability structures
2. Strategy - Climate impact on business model and strategic planning
3. Risk management - Climate risk identification, assessment, and management processes
4. Metrics and targets - Quantitative climate performance indicators and goals

Global Alignment and Standards Framework

ASRS S2 is built on internationally recognised frameworks:

• TCFD Framework (Task Force on Climate-related Financial Disclosures)
• IFRS S1 and S2 alignment for global consistency
• Australian Sustainability Reporting Standards (ASRS) integration

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ASRS S2 vs AASB S2: how are they different?

ASRS S2 and AASB S2 refer to the same standard - there is no difference between them. The confusion often arises from different naming conventions:

• ASRS S2: Refers to "Australian Sustainability Reporting Standards Standard 2"
• AASB S2: Refers to "Australian Accounting Standards Board Standard 2"

Both terms describe the identical climate disclosure standard issued by the Australian Accounting Standards Board (AASB). The AASB created the Australian Sustainability Reporting Standards (ASRS) framework, which includes both S1 and S2 standards.

Why the Different Names?

• ASRS emphasizes the sustainability reporting framework
• AASB emphasizes the issuing body (Australian Accounting Standards Board)
• Both refer to the same mandatory climate disclosure requirements

Common Search Variations:

• AASB S2 Climate-related Disclosures
• ASRS S2 Climate-related Disclosures
• Australian Sustainability Reporting Standards S2
• Australian Accounting Standards Board S2

All these terms refer to the same standard with identical compliance requirements, timelines, and disclosure obligations.

AASB S2 vs AASB S1: ASRS Framework Components

Standard

Status

Focus Area

AASB S1 - Voluntary (part of ASRS) - General sustainability-related financial information

AASB S2 - Mandatory (part of ASRS) - Climate-specific risks and opportunities

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Who must comply with ASRS S2 in Australia?

AASB S2 compliance is required for three reporting cohorts:

Group 1 (2025): Large Australian Entities

• Revenue more than $500 million
• Assets more than $1 billion
• Employees more than 500
• NGER publication threshold entities

Group 2 (2026): Medium-Large Entities

• Revenue more than $200 million
• Assets more than $500 million
• Employees more than 250
• Large super funds ($5B+ AUM)

Group 3 (2027): Smaller Eligible Entities

• Revenue more than $50 million
• Assets more than $25 million
• Employees more than 100

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ASRS S2 implementation timeline Australia

• 1 January 2025: Group 1 entities begin reporting
• 1 July 2026: Group 2 entities commence
• 1 July 2027: Group 3 entities start compliance

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Key features of ASRS S2 climate disclosures

• Integrated Reporting: Published alongside annual financial statements
• External Assurance: Subject to independent verification requirements
• Scenario Analysis: Climate resilience testing under multiple temperature scenarios
• Scope 1, 2, 3 Emissions: Comprehensive greenhouse gas reporting
• Forward-Looking: Focus on future financial impacts, not just historical data

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ASRS S2 and the Australian Corporations Act 2001

ASRS S2 compliance is enforced through amendments to the Corporations Act 2001, with ASIC (Australian Securities and Investments Commission) as the primary regulator overseeing implementation and enforcement.

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Getting ready for ASRS S2: next steps for Australian businesses

1. Assess eligibility: Determine your reporting cohort and timeline
2. Gap analysis: Review current climate disclosure capabilities
3. Governance setup: Establish climate oversight structures
4. Data systems: Implement robust climate data collection and management
5. Professional support: Engage climate reporting specialists and auditors

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Contact us today to get started!

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Learn more:

• Net Zero guide
• Carbon offsets
• Becoming carbon neutral
• Carbon calculator tools
• Emission scopes
• Trace methodology