What AASB S2 really means for CFOs (and how to stay in control)

For Australian CFOs, 2026 marks a turning point

Climate disclosure is no longer a sustainability sidebar - it’s a financial reporting obligation. The introduction of AASB S2 under the Australian Sustainability Reporting Standards (ASRS) moves climate risk into the same accountability framework as revenue, liquidity, and governance.

“This is not a one-person job - but ownership must sit with the CFO. Climate creates financial risks and opportunities that affect cash flow, cost of capital, and strategy. That’s why S2 sits under IFRS - it’s fundamentally financial,” said Rachel Riley, Chief Commercial Officer and Co-founder of Drova.

That single insight has tremendous implications for the CFO’s role: what was once extra-financial reporting is now core finance.

A practical map, not another framework

CFOs in the recent ‘AASB S2 in plain finance’ webinar were blunt about what they needed. Not more frameworks, but a more practical way to get this done.

That demand led to the creation of the new ASRS Gap: CFO Disclosure Checklist - a structured guide designed to make S2 reporting auditable, defensible, and achievable. Rather than adding complexity, it translates the standard’s 80-plus clauses into a clear sequence of tasks:

1. Identify boundaries and data sources.
2. Assign owners across finance, risk, sustainability, and board.
3. Link evidence to each disclosure.
4. Document judgements and omissions up-front.

The result is an assurance-ready workflow that mirrors the rigor of financial audits - without the last-minute scramble.

As Jack Duffy, Head of Finance at Marubeni Itochu Tubulars Oceania, put it: “Without data, you can’t set targets or integrate strategy.” He warned that most finance teams “aren’t climate experts,” and that the real challenge lies “outside the metrics” - governance, climate risk, strategy, and integration across the business.”

Why start now

Even for smaller entities, delay is costly. “Start as early as possible,” Duffy urged. “Early action gives us time to test, refine, and make sure our approach is auditable - before reporting becomes mandatory.”

The checklist simplifies that early start by converting complex regulatory text into CFO-ready language. Each section defines what auditors will expect, and includes example disclosure wording and evidence templates, so teams can move from theory to traceable documentation quickly.

Ownership and oversight

Riley was clear that while S2 touches many functions, ownership cannot diffuse. “The CFO must own S2, with support across four lanes: finance, risk, compliance / sustainability, and the Board.” When roles aren’t defined, she warned, “organisations end up with duplicated work, inconsistent numbers, and climate risks sitting outside the risk register.”

That advice echoes the checklist’s core intent - create clarity of ownership before the assurance cycle begins. It prompts CFOs to document where climate data originates, how it links to financial statements, and how oversight flows to the board.

The assurance imperative

As Riley cautioned, “This isn’t a practice run. Limited assurance applies in the next reporting cycle. Processes matter as much as numbers.”

Her point underscores a cultural shift: ASRS S2 doesn’t just measure emissions; it measures control. Evidence, not intent, is the currency. The checklist’s audit columns reinforce that discipline, reminding CFOs to store and tag the right proofs - governance minutes, boundary definitions, data sources, and rationale papers - so assurance becomes verification, not reconstruction.

Data, boundaries, and confidence

According to Misha Cajic, Co-Founder of Avarni, “Completeness is the number one audit principle. Auditors will ask: ‘How do you know you captured everything?’ ” He added that “finance already owns most of this data - which is why finance leads this work.”

That statement captures why this checklist is tailored for CFOs rather than sustainability managers. It speaks the language of data lineage, financial boundaries, and defensibility.

A practical tool for CFOs

Ultimately, the ASRS Checklist reframes sustainability as financial governance. It shows CFOs how to translate climate-related risks and opportunities into the same language they already use - capital allocation, impairment, and cash flow.

By following the step-by-step disclosure structure, finance teams gain:

• Clarity on who owns what.
• Confidence that evidence will stand up to audit.
• Capacity to meet assurance standards without extra headcount.

That’s the real value: time reclaimed, risk reduced, and credibility restored.

Ready to run

“AASB S2 is achievable with the right foundations. Start now. Align responsibilities. Get your data right. Build a repeatable process,” said Riley.

For CFOs seeking those foundations, the ASRS Gap: CFO Disclosure Checklist provides exactly that - a concise, auditable roadmap to turn new obligations into a governed process.