What are the thresholds for Group 1, Group 2 and Group 3?

Group 1 is two of $500 million revenue, $1 billion gross assets and 500 employees. Group 2 is two of $200 million, $500 million and 250 employees, and Group 3 is two of $50 million, $25 million and 100 employees. All figures are consolidated and you test them every year.

Do we count revenue, assets or employees, and how many of the three?

Two of the three. Revenue is consolidated revenue for the financial year, while gross assets and employee numbers are measured at the end of the financial year, with part-time employees counted as a fraction of a full-time equivalent. All three tests cover the entity and every entity it controls.

How do we work out which Scope 3 categories are material for us?

You screen all fifteen GHG Protocol categories, estimate each roughly off accounts payable spend, and document why you included or excluded each one. The screen is the deliverable as much as the answer, because the practitioner will test the reasoning behind an exclusion at least as hard as the numbers behind an inclusion. Expect the answer to be concentrated in a handful of categories.

Glossary›Regulation, capture and thresholds / Regulation, capture and timing›Asset owner (capture by funds under management)

Glossary term

Cluster B · B15

Tier 1

Asset owner (capture by funds under management)

Definition

An asset owner is a registered scheme, registrable superannuation entity or retail corporate collective investment vehicle captured by the value of the assets it holds rather than by the two-of-three size test. An asset owner with assets of $5 billion or more reports as a Group 2 entity, for financial years commencing on or after 1 July 2026.

Corporations Act 2001 (Cth) s 292A

· value of assets threshold, $5 billion, Group 2 ·

In force

On this page

In practice
What the assurer does with it
Commonly confused with
Timing and relief
Sources
Related terms
Related questions

Cluster

B · Regulation, capture and thresholds / Regulation, capture and timing, 26 terms

In practice

This limb exists because the ordinary size test measures the wrong thing for a fund. A responsible entity or trustee can run a very large pool of member money through a small operating business with modest revenue and few employees. Testing it on revenue, gross assets of the operating entity and headcount would miss it entirely, which is why the Act tests it on the assets it is responsible for.

Three mechanics.

It is an alternative limb, not an addition. An asset owner below $5 billion is not thereby exempt. It falls back to the ordinary two-of-three size test and is assessed on those thresholds like any other entity, which for most means Group 3 at the earliest.

It places the entity in Group 2, not Group 1. An asset owner meeting the $5 billion test starts with financial years commencing on or after 1 July 2026 regardless of how far above the threshold it sits. There is no larger-asset-owner tier that pulls it into Group 1 on this limb.

For a retail CCIV the test applies at the vehicle level. The threshold is assessed on the sum of the assets of all sub-funds at the end of the financial year, not sub-fund by sub-fund. A CCIV with several mid-sized sub-funds can cross $5 billion in aggregate while no individual sub-fund is close.

The point that matters commercially for a first-time asset owner reporter is what gets disclosed rather than whether. An asset owner’s climate exposure is almost entirely in its investments, which means the disclosure work concentrates in financed emissions and in Scope 3 Category 15 rather than in its own operational footprint. That is a data problem dependent on investee disclosure, and it is the reason the amendments to the greenhouse gas disclosure requirements issued in December 2025 (effective for annual reporting periods beginning on or after 1 January 2027) are more consequential for asset owners than for operating businesses.

What the assurer does with it

The capture assessment is tested at acceptance against the value of assets at the end of the financial year, agreed to the audited financial statements of the scheme, fund or vehicle. For a CCIV the assurer expects the aggregation across sub-funds shown explicitly. In the engagement itself the asset owner profile changes what is tested: the operational inventory is small and quickly cleared, and the evidence effort concentrates on the investment-related disclosures: the methodology used, the coverage of the portfolio, how uncovered holdings are treated, and whether the data is investee-reported, estimated or proxied. They accept a documented methodology with stated coverage and a clear account of estimation. They reject a portfolio figure with no stated coverage percentage, because a financed emissions number covering an unstated fraction of the portfolio is not interpretable.

Commonly confused with

The size test, which applies to the operating entity’s own revenue, gross assets and employees. An asset owner has both sets of numbers and only one of them is the capture basis. Also confused with APRA’s prudential requirements, which are separate obligations to a separate regulator and do not discharge the Chapter 2M sustainability report.

Timing and relief

Asset owners meeting the $5 billion test report for financial years commencing on or after 1 July 2026. Note the lodgement consequence: registered schemes and registrable superannuation entities lodge within three months of year end, not four, so an asset owner has a materially shorter post-year-end window than an operating company of similar size.