We are foreign-owned. Does the Australian entity report?

Yes, if the Australian entity has its own Chapter 2M financial reporting obligation and meets a section 292A test, because it is tested on its own consolidated numbers rather than the global group's. Foreign ownership is not a factor in section 292A. A parent's climate report prepared overseas does not automatically discharge the Australian obligation.

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.

Glossary›AASB S2 disclosure requirements / AASB S2 mechanics›Industry-based metrics

Glossary term

Cluster C · C24

Tier 1 · differentiator

Industry-based metrics

Definition

Industry-based metrics are sector-specific climate disclosures, derived from the SASB standards, that IFRS S2 requires entities to consider. AASB S2 removes that requirement. The Australian standard deletes the IFRS S2 paragraphs mandating industry-based disclosure as an interim measure, pending the AASB developing an Australian industry metrics set.

AASB S2

· IFRS S2 paragraphs 12, 23, 28(b), 32 and 37 deleted or modified in the Australian text · Australian industry-based metrics not yet issued

On this page

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

Cluster

C · AASB S2 disclosure requirements / AASB S2 mechanics, 25 terms

In practice

This entry exists because a great deal of Australian vendor and advisory content asserts that SASB industry metrics are required here. They are not, and an entity that builds a reporting process around them has bought work the standard does not ask for.

The AASB incorporated IFRS S2 into AASB S2 and then made a set of Australian modifications. The most consequential of them is the removal of industry-based metrics. The deletions run across the standard rather than sitting in one place: the paragraphs affected are 12, 23, 28(b), 32 and 37, together with related application guidance, and all of them relate to the SASB-derived industry disclosure requirement. The AASB’s stated reason is that it is an interim position while an Australian industry-based metrics project runs, with a target that has been publicly associated with 1 July 2030.

Three things follow for a captured entity today:

Nothing sector-specific is mandatory. The required quantitative disclosures are the seven cross-industry metrics in paragraph 29. There is no second, sector-specific list to satisfy.

Voluntary use is still available and still sensible in some sectors. An entity in mining, real estate, agriculture or financial services may find SASB metrics the clearest way to describe its exposure, and nothing stops it disclosing them. But it becomes a voluntary disclosure sitting inside a statutory report, which has consequences below.

The deletion is interim, not permanent. An Australian set is expected. An entity in a sector with obvious SASB-style metrics has a reason to understand them now, even though they are not required, because it is cheaper to build the data once.

The 2030 date is not speculation. The AASB’s basis for conclusions records that it has added industry-based disclosure requirements to its workplan, and quotes the Treasury Policy Position Statement: Mandatory climate-related financial disclosures (January 2024): “Entities should only be required to disclose against well-established and understood industry-based metrics from 1 July 2030 onwards.” The AASB states it intends to finalise mandatory industry-based requirements by 2030.

The deleted paragraphs are listed in the standard itself: IFRS S2 paragraphs 12, 23, 28(b), 32, 37, B65(d) and B67 were modified or omitted so that an entity applying AASB S2 is not required to disclose industry-based metrics or to consider the industry-based disclosure topics. The definition of “disclosure topic” was also omitted from Appendix A.

What the assurer does with it

Because the requirement is deleted, the assurer does not test for the absence of industry metrics, and an entity omitting them is compliant. Where an entity chooses to disclose them voluntarily inside the sustainability report, the position reverses: the disclosure is in the report, so it is in the assurance scope from the second reporting year when limited assurance extends to all disclosures.

The assurer then wants the same evidence for a voluntary metric as for a mandatory one, including the definition applied and the source of any sector benchmark quoted. The practical caution for a CFO is that a voluntary metric is not a free addition. It is an assurable statement, and a poorly supported one can attract a query or worse on a disclosure the entity was never required to make.

Commonly confused with

Cross-industry metrics, which are required and apply to everyone. Also confused with the position under IFRS S2, which does require industry-based consideration: a group with an overseas parent reporting under IFRS S2 may be preparing industry metrics for consolidation purposes while its Australian statutory report does not require them.

Timing and relief

Not a relief and not time-limited in the usual sense. The requirement is absent from the Australian standard rather than deferred. It changes when the AASB issues an Australian industry metrics standard, which has not happened. The Treasury policy position statement associates any such requirement with 1 July 2030 onwards, and the AASB states it intends to finalise mandatory industry-based requirements by 2030.