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Climate-focused scope
S2 zeroes in on climate-related disclosures.
AASB S2 explained
Climate-related disclosures for Australian reporters.
AASB S2 will localise IFRS S2, requiring climate-related risk and opportunity disclosures, scenario analysis, and Scope 1-3 emissions. Use this guide to prepare your governance, strategy, and metrics.
What is AASB S2?
AASB S2 adapts IFRS S2 for Australia. It covers climate-related risks, opportunities, governance, strategy, risk management, metrics & targets, including scenario analysis and Scope 1, 2, and relevant Scope 3 emissions.
Risk
Scenario analysis requirement
S2 requires qualitative or quantitative scenario analysis on climate-related risks.
GHG
Scope 3 greenhouse gas metrics
Relevant Scope 3 emissions categories must be disclosed if material.
Core AASB S2 focus areas
Climate-related risks. Physical and transition risks that could impact financial performance.
Climate-related opportunities. Low-carbon products, services, and efficiencies that drive value.
Scenario analysis. Forward-looking analysis of different climate futures.
Metrics & targets. GHG emissions, financed emissions (if applicable), internal carbon prices, and targets.
WHY IT MATTERS
Why AASB S2 elevates corporate climate strategy
Better climate risk decisions. Boards see which physical and transition risks require action.
Opportunity visibility. Climate-related opportunities can be quantified alongside risks.
Stakeholder confidence. Investors, lenders, and regulators get consistent climate data.
Scenario discipline. Scenario analysis keeps planning grounded in science-based pathways.
SCENARIO + GOVERNANCE
How to meet AASB S2 scenario analysis and governance expectations
- Map governance roles. Clarify board oversight, management responsibilities, and escalation paths.
- Choose climate scenarios. Select at least one scenario aligned with Paris Agreement pathways and one with higher warming.
- Assess resilience. Explain how the strategy holds up under each scenario and outline transition plans.
- Document risk management. Show how climate risks feed into enterprise risk systems and controls.
MEASUREMENT
Metrics, targets, and Scope 3 disclosures under AASB S2
- GHG emissions. Report Scope 1, Scope 2, and relevant Scope 3 categories with methodologies.
- Climate-related metrics. Share internal carbon price, capital expenditure on climate projects, or financed emissions where relevant.
- Targets & progress. Describe climate targets, timelines, and performance against them.
- Risk management disclosures. Detail controls, thresholds, and triggers for climate-related risks and opportunities.
Actions to get ready for AASB S2
Update climate data inventory. Check emissions, scenario, and financial data availability.
Engage strategy + finance teams. Ensure resilience narratives align with capital plans.
Pilot climate scenario workshops. Use RunSustainably to log assumptions, outcomes, and owners.
GLOSSARY SNAPSHOT
AASB S2 glossary snapshot
Climate-related risks. Physical (acute/chronic) and transition risks that affect enterprise value.
Climate-related opportunities. Potential benefits from resource efficiency, new products, or markets.
Climate scenario analysis. Evaluating business resilience under different climate futures.
FAQS
AASB S2 explained FAQs
What is AASB S2?
It is the Australian climate-related disclosure standard based on IFRS S2.
What climate scenarios do we need?
At least one aligned with Paris goals and another that reflects higher warming to stress test resilience.
Do we need Scope 3 emissions?
Disclose relevant Scope 3 categories when material; document methodologies and assumptions.
How does S2 link to corporate climate strategy?
S2 requires a narrative on how climate risks/opportunities influence strategy, governance, and financial planning.
Drova RunSustainably keeps objectives, approvals, and disclosures aligned across finance and sustainability teams.
Ready to organise ASRS reporting in one place?
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