AASB S1 / S2 — Sustainability and Climate Disclosures
The Australian Accounting Standards Board’s sustainability and climate disclosure standards, aligned with ISSB IFRS S1 and S2, mandating climate-related financial disclosures for large Australian entities from 1 January 2025.
AASB S1 (General Sustainability Disclosures) and AASB S2 (Climate-related Disclosures) are the Australian standards corresponding to the International Sustainability Standards Board’s IFRS S1 and IFRS S2. They require Australian entities of sufficient size to disclose material information about sustainability-related and climate-related risks and opportunities, including governance, strategy, risk management, metrics, and targets.
Adoption is phased by entity size — the largest reporting entities are caught from 1 January 2025, with smaller groups phased in across 2026 and 2027. Assurance over climate disclosures is required, scaling from limited to reasonable assurance as the regime matures.
- 01
Disclosure of governance arrangements for sustainability and climate-related risks.
- 02
Disclosure of strategy, including scenario analysis for climate risk.
- 03
Risk management processes for identifying, assessing, and managing climate risk.
- 04
Quantitative metrics — Scope 1, Scope 2, and ultimately Scope 3 GHG emissions.
- 05
Targets and progress against them, including transition-plan disclosures.
- 06
Third-party assurance over climate disclosures (scaling over the transition period).
AASB S1 / S2 is the disclosure regime that converts ESG from a marketing exercise into a financial-reporting obligation. The numbers will be auditor-tested. Boards that previously left climate to the sustainability team now need the same evidence trail they would expect for any other financial-reporting line item. The challenge is operational: collecting emissions data, building scenario analysis, and producing assurance-grade disclosure is a year-round program, not a quarter-end push.