.png)
If your financial year began on or after 1 July 2026 and you meet the size tests, you are now a Group 2 reporter under the Australian Sustainability Reporting Standards (ASRS). The clock has started, and your first climate disclosure will be lodged with your FY28 annual report.
The short answer: start with governance, run your emissions inventory and climate risk assessment in parallel, then move into disclosure preparation and assurance. Most of the work sits in the first three quarters of your reporting year, so the companies that begin now avoid the bottleneck (and the surprise bills) later.
I have spent the last year talking with finance leaders working through exactly this. The pattern is consistent: the standard is manageable when you sequence it properly, and painful when you leave it until the deadline is in sight. This guide walks through the sequence we recommend, built around the year-one roadmap below.
You are a Group 2 entity if your financial year begins on or after 1 July 2026 and you meet at least two of three thresholds on a consolidated basis: $200 million or more in revenue, $500 million or more in gross assets, or 250 or more employees. Entities that report under the NGER scheme are also drawn in.
Group 2 covers a large band of mid-market and large private companies in Australia, many of which have never produced a climate disclosure before. Unlike voluntary sustainability reporting, ASRS is mandatory and sits under the Corporations Act, so it attaches to entities that lodge financial reports under Chapter 2M.
The disclosures follow AASB S2, the Australian version of the ISSB climate standard. That means governance, strategy, risk management, and metrics and targets, all built on a defensible evidence base your auditor can test. This is a finance problem, not a sustainability problem, and it belongs on the CFO's desk.
Because the work takes longer than the calendar suggests. A first-year climate risk assessment can run eight to ten weeks. Disclosure preparation runs eight to twelve. Your emissions inventory needs a full data-collection cycle before the numbers are reliable enough to disclose. Stack those end to end and you have consumed most of your reporting year.
There is also a cost argument. Treasury has estimated ASRS preparation at $750,000 to $1.6 million for large organisations under a consultancy-led approach. A lot of that cost comes from compressed timelines: rushed data gathering, external consultants brought in late, and rework when the first attempt does not hold up to assurance.
The reassuring part: year one requires only limited assurance. You do not need a perfect, exhaustive disclosure. You need a defensible, structured approach that demonstrates you have identified your material climate risks and can show your working. Starting early is what makes that achievable in-house.
The roadmap below shows how the major workstreams sequence across your first reporting year. Governance comes first because auditors want to see established structures and evidence from day one. Emissions and climate risk run through the middle. Disclosure, assurance, and board sign-off land at the end.
Step 1: Set up governance and review (weeks 1 to 4). Decide who owns ASRS internally, establish board and committee oversight, and document how climate is governed. "Nobody takes ownership" is the single most common failure point I hear about, so name an accountable owner before anything else. Confirm your reporting boundary at the same time.
Step 2: Build your emissions inventory (ongoing). Start Scope 1 and 2 data collection immediately, then map your material Scope 3 categories. This is your longest-running workstream, so it should begin in parallel with governance rather than waiting for it to finish.
Step 3: Run your climate risk assessment (weeks 8 to 18). Identify and assess your physical and transition risks and opportunities, then test them against climate scenarios. This is a cross-functional exercise that needs finance, operations, and leadership input. For context, SEE Group reduced its climate risk assessment from 13 weeks to 2 weeks using Trace AI tooling.
Step 4: Prepare your disclosure (weeks 20 to 32). Draft your AASB S2 disclosure across the four pillars once the core inputs are locked. A focused, decision-useful disclosure beats an exhaustive one: SEE Group is targeting an 8-page first-year disclosure against an industry average of 30 to 40 pages.
Step 5: Complete assurance activities (auditor dependent). Your auditor reviews the disclosure and evidence for limited assurance. Build in a pre-assurance check earlier so nothing structural surprises you at the end.
Step 6: Board sign-off and lodgement. The board approves the disclosure and it is lodged with your FY28 annual report. Everything here depends on the earlier steps being locked, which is exactly why the sequence matters.
The first is treating ASRS as a sustainability project and parking it with a team that lacks the authority to pull data and decisions across the business. It is a financial disclosure, and it needs finance ownership.
The second is starting with the disclosure document instead of the governance and data underneath it. The write-up is the last step, not the first, and drafting before your evidence is ready guarantees rework.
The third is underestimating the emissions inventory. Scope 3 in particular requires a data-collection cycle you cannot compress at the end. The fourth is waiting for certainty on every methodology question before starting: limited assurance in year one rewards a defensible, structured approach over false precision.
Trace is software, not a consultancy. Instead of paying six or seven figures for an external team to run your first disclosure, you use a platform that structures the whole year-one workflow: governance evidence, emissions inventory, climate risk assessment, and an audit-ready disclosure your finance team owns.
That model is why SEE Group cut its climate risk assessment from 13 weeks to 2. It is also why finance leaders rate us the way they do: Trace is #1 for Usability on G2 (8.86 against Workiva's 8.35) and #1 for Results (8.58), and a Momentum Leader in ESG Reporting and Sustainability Management.
If you have just come into scope for Group 2, the best first move is to map your timeline. Book a free 30-minute call to map your ASRS readiness and we will walk through where you are and what to sequence first.
Trace is a climate reporting platform specialising in ISSB and AASB standards, helping businesses navigate mandatory climate disclosure with clarity and confidence.
London - Sydney
.png)
.png)
