Governance
Disclose how the Board and management oversee climate-related risks and opportunities. Roles, reporting lines, the cadence of climate matters on the agenda, and the link between climate metrics and executive remuneration are all in scope.
Compliance reference · AASB S1 / S2
Climate disclosure with financial-statement discipline.
AASB S1 and AASB S2 bring sustainability and climate-related disclosures inside the financial reporting boundary. The largest Australian entities have been reporting from financial years starting on or after 1 January 2025; smaller entities follow in staged tranches. This page is the plain-English version.
Issuer
AASB
Aligned with
ISSB IFRS S1 / S2
Group 1 commencement
1 Jan 2025
Pillars
Four (TCFD)
What it actually requires
Four pillars. One disclosure boundary.
AASB S1 sets the general requirements; AASB S2 deepens the climate-specific disclosures. Both follow the TCFD-aligned four-pillar structure that ISSB inherited. The work for assurance-grade disclosure sits inside this shape.
Strategy
Identify climate-related risks and opportunities relevant to the entity over short, medium, and long horizons. Describe their actual and potential impact on the business model, strategy, and financial planning. Run scenario analysis to test resilience.
Risk management
Describe the processes for identifying, assessing, and managing climate-related risks. Show how those processes integrate into the entity-wide risk management approach. The standards expect identification to be active and periodic, not retrospective.
Metrics & targets
Disclose Scope 1, 2, and 3 emissions, climate-related metrics used to assess and manage climate-related risks, and targets that govern progress. Methodology, data quality, and verification status are all part of the disclosure.
Where reporting teams hit the wall
Four problems that show up in nearly every first-cycle AASB S1 / S2 report.
Scope 3 data is everywhere except where you need it
Scope 1 and 2 are bounded. Scope 3 covers the value chain — suppliers, investments, products in use, employees commuting. The data lives across procurement, vendor records, investee disclosures, and survey responses, and it has to be reconciled.
Your Scope 3 calculation is harder than the rest combined.
Methodology drift between reporting cycles
The first cycle methodology is documented. By the second cycle three of the assumptions have moved — a new emissions factor library, an investee mix change, a re-stated baseline. Comparability suffers and the audit team asks why.
Each cycle introduces a new restatement.
Scenario analysis stays generic
Scenario analysis is run, results are summarised, and the conclusion is "the entity is broadly resilient." The auditor expects the analysis to be tied to the entity's actual exposures with quantified outcomes — not a high-level narrative.
Your scenario analysis cannot be tested against reality.
Reporting deadlines arrive faster than the data
Sustainability data is collected on annual cycles that are not yet aligned with the financial calendar. Auditors arrive expecting climate data with the same maturity as financial data, and the gap shows up in the working papers.
Your sustainability report runs at financial-statement pace without financial-statement infrastructure.
How BackPro maps to AASB S1 / S2
Disclosure assembled from the source of record.
Climate disclosure expects financial-statement discipline. Each row maps an AASB S1 / S2 obligation to the part of BackPro that does the work.
AASB S1 / S2 pillar
Governance
Board agendas, management oversight records, climate-related decisions, and remuneration links live in the platform with version history and approval signatures. The audit log signs each material change in HMAC-SHA256 chain. The governance disclosure can be assembled from the source of record, not reconstructed from minutes.
AASB S1 / S2 pillar
Strategy & scenario analysis
Scenario analysis inputs, model versions, exposure mappings, and result narratives are versioned together. Each scenario output ties to the assumptions that produced it. Restated assumptions in subsequent cycles surface as findings rather than buried changes.
AASB S1 / S2 pillar
Risk management integration
Climate-related risks integrate into the broader risk register the firm already runs. The Risk Correlator agent surfaces cross-domain exposures — operational, vendor, climate — that single registers would miss. Risk findings inherit the audit chain by default.
AASB S1 / S2 pillar
Metrics, targets, and emissions data
Scope 1, 2, and 3 emissions calculations run as deterministic templates with explicit inputs, outputs, and methodology. Each metric has a source trail. Methodology changes and emissions factor updates are versioned. The disclosure shows the workings.
AASB S1 / S2 pillar
Verification & assurance support
Assurance teams require evidence of completeness, calculation accuracy, and methodology consistency. The audit log produces that evidence as a side effect — verified by the chain, not assembled by the team. Assurance becomes a sampling exercise rather than a re-construction one.
Who reports under AASB S1 / S2?
The disclosures land across three accountability seats.
Frequently asked questions
What sustainability and finance teams ask before bringing AI inside the disclosure boundary.
Who do AASB S1 and S2 apply to?
AASB S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and AASB S2 (Climate-related Disclosures) apply to entities required to prepare financial reports under Chapter 2M of the Corporations Act 2001. Adoption is staged across three groups based on size thresholds (revenue, gross assets, employees), with the largest entities reporting first from financial years beginning on or after 1 January 2025. Group 2 and Group 3 entities follow in subsequent staged commencements.
How do AASB S1 / S2 relate to ISSB IFRS S1 / S2?
The Australian standards are aligned with the International Sustainability Standards Board (ISSB) global baseline — IFRS S1 and IFRS S2. The AASB issued the local versions in late 2024, with Australia-specific guidance on commencement, transitional provisions, and assurance. Entities preparing reports under both regimes generally find that work done for the IFRS standards translates directly into the AASB standards.
What does Scope 3 emissions reporting actually require?
Scope 3 covers indirect emissions across the value chain — purchased goods and services, capital goods, fuel and energy activities, transportation, waste, business travel, employee commuting, leased assets, investments, and downstream activities. The standards require entities to disclose Scope 3 categories that are material. Methodology, data sources, and quality have to be transparent. Phased relief applies for the first reporting cycles to allow entities to develop the underlying data infrastructure.
How does BackPro support AASB S1 / S2 compliance?
BackPro provides a source of record for sustainability data — governance records, scenario analysis inputs and outputs, risk integration evidence, emissions calculations, and methodology versioning. The audit log signs every change in an HMAC-SHA256 chain, producing the evidence trail assurance teams expect. The Risk Correlator agent surfaces climate-related exposures that span operations, vendors, and incidents. Disclosure assembly draws from the source of record.
Does BackPro replace our carbon accounting platform?
No. BackPro complements specialised carbon accounting platforms (Persefoni, Watershed, Greenly, custom). Your carbon platform remains the calculation engine for emissions data. BackPro automates the disclosure assembly, the methodology versioning, the audit trail, and the integration with the broader risk and governance program. Methodology and emissions outputs flow into the audit chain so the disclosure has the evidence trail your auditor wants.
How does BackPro itself meet our security requirements for sustainability data?
BackPro deploys entirely inside your Azure, AWS, or GCP tenant. Sustainability data, scenario inputs, and disclosure drafts never leave your perimeter. The platform is designed to align with APRA CPS 234 (Information Security) — encryption at rest and in transit, role-based access control, tenant isolation, and a tamper-evident HMAC-chained audit log. SOC 2 Type II and ISO/IEC 27001 readiness programs are underway.
Ready to bring climate disclosure inside the audit chain?
One walkthrough covers architecture, audit chain, deployment model, and how the platform maps to each AASB S1 / S2 pillar.