Glossary term
Cluster C · C1
Tier 1 · differentiator
AASB S2
Definition
AASB S2 Climate-related Disclosures is the Australian standard that sets what a sustainability report must contain. It requires disclosure across four pillars: governance, strategy, risk management, and metrics and targets, including Scope 1, Scope 2 and Scope 3 greenhouse gas emissions. It applies to annual reporting periods beginning on or after 1 January 2025.
On this page
In practice
The four pillars are the whole structure of the disclosure and it is worth knowing which paragraphs carry which.
Pillar
Paragraphs
What it asks for
Governance
5 to 7
Who oversees climate risk, how they are informed, what skills they have, and management’s role
Strategy
8 to 22
The risks and opportunities identified, their effect on the business model and value chain, the current and anticipated financial effects, and climate resilience tested through scenario analysis
Risk management
24 to 26
The processes used to identify, assess, prioritise and monitor climate risks, and how they integrate with overall risk management
Metrics and targets
27 to 37
Greenhouse gas emissions, industry-based metrics, internal carbon price, remuneration linkage, and any targets with progress against them
Two features matter to a first-time reporter. The standard is disclosure-based, not performance-based: it requires you to say what you do, not to reduce emissions or set targets. And the governance and strategy pillars are narrative, which entities routinely underestimate. Governance disclosures are assured from the first reporting year.
What the assurer does with it
The assurer starts from which version of the standard the basis of preparation names, and whether the disclosures match it. Governance disclosures and the strategy risk and opportunity disclosures are inside the year-one review scope under ASSA 5010 paragraph 10(a), alongside Scope 1 and Scope 2, so the narrative pillars are tested from the first report rather than deferred with the rest.
They accept a basis of preparation naming AASB S2 as the standard applied, a disclosure set mapped paragraph by paragraph against the four pillars, and evidence behind each narrative claim. They reject a basis of preparation citing IFRS S2 as the standard applied, since the statutory obligation is to AASB S2, and a pillar answered with industry commentary rather than with the entity’s own arrangements.
Timing and relief
AASB S2 applies for annual reporting periods beginning on or after 1 January 2025 under paragraph AusC1.1, with earlier application permitted, and each entity reaches it on the Corporations Act’s three-group commencement schedule. Appendix C first-year reliefs run from the entity’s own date of initial application rather than a fixed calendar year.
The AASB approved AASB S2025-1 Amendments to Greenhouse Gas Emissions Disclosures on 15 December 2025, aligning AASB S2 with the ISSB’s December 2025 amendments to IFRS S2. The amendments provide reliefs and clarifications on Scope 3 Category 15 financed emissions, global warming potential values, industry classification systems and jurisdictional measurement methods. Paragraph C1B makes them effective for annual reporting periods beginning on or after 1 January 2027, with early adoption permitted. They are therefore not automatically available to a Group 2 entity in its first reporting year unless it early adopts.
Sources
1
2
3
ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001
AUASB
4
Review status
Review required
Last reviewed
15 September 2026
Editorial pass, unsigned
Reviewer required
Registered company auditor
Next scheduled review
1 January 2027
Part of
Cluster C, AASB S2 disclosure requirements / AASB S2 mechanics
25 terms on what the climate disclosure standard actually requires, pillar by pillar, plus the reliefs and the effort standard.
Related terms
The standard set AASB S2 belongs to, and where AASB S1 sits within it
The voluntary general standard an entity may apply alongside AASB S2
The international text AASB S2 is based on, and the compliance claim not to make
Related questions
Do we have to do mandatory climate reporting?
−
You must prepare a sustainability report if you already lodge a financial report under Chapter 2M of the Corporations Act and you also meet one of the size, NGER or funds-under-management tests in section 292A. Both gates have to be passed: with no Chapter 2M obligation, section 292A never engages however large you are. Which of the three reporting groups you fall into decides which financial year is your first.
Do we have to report Scope 3 in year one?
+
No. AASB S2 gives first-time reporters relief from disclosing Scope 3 greenhouse gas emissions in their first annual reporting period, and Scope 3 is required from the second year. Taking the relief in year one is normal, but the supplier data work needs to start in year one anyway.
Do we need comparatives in our first report?
+
No. AASB S2 relieves first-time reporters from disclosing comparative information in their first annual reporting period, and comparatives are required from year two. That means your year-one numbers and working papers will be looked at again, so build the year-one file as if it will be re-examined.
Where this sits commercially
Carbonhalo builds the disclosure against AASB S2 paragraph by paragraph, and leaves the assurance to the assurer.
Other terms in this cluster
AASB S2