Phase
Phase-in of cohorts 1-3
Large entities move first, followed by medium and smaller entities over several years.
Do I need to comply with AASB S2?
Work out if the Australian climate-related disclosure rules apply to you.
Use this guide to understand AASB S2 requirements, materiality thresholds, and reporting expectations so you know whether the Australian climate reporting regime captures your organisation.
AASB S2 applicability summary:
Who needs to comply with AASB S2?
AASB S2 will apply to entities captured by Treasury’s climate reporting cohorts. Coverage is based on size (consolidated revenue, assets, employees) and whether the entity is a listed company, financial institution, or registered super fund.
Risk
Disclosure lens
Focus on material climate-related risks, opportunities, and metrics.
✅
Assurance-ready expectation
Climate disclosures will move toward assurance requirements over time.
Signals you may fall into AASB S2 cohorts
Size thresholds. Revenue ≥ AUD 500m, assets ≥ AUD 1bn, or ≥ 500 employees (cohort 1) with lower thresholds later.
Listing status. ASX-listed entities and large financial institutions are prioritised.
Climate exposure. Entities with material climate risks or opportunities should prepare early even if thresholds are borderline.
Supply chain pressure. Large customers or lenders may ask for S2-aligned data regardless of mandatory status.
REQUIREMENTS
Core AASB S2 reporting requirements
TCFD-aligned disclosures. Governance, strategy, risk management, metrics & targets.
Climate-related risks & opportunities. Share physical/transition risks, opportunities, and their financial impact.
Scenario analysis. Describe resilience under different climate futures.
Scope 1-3 emissions. Provide methodologies and progress vs. targets.
MATERIALITY
How to approach AASB S2 materiality
- Assess enterprise value impact. Focus on climate information that could influence investor decisions.
- Document thresholds. Record why a risk, opportunity, or Scope 3 category is material or not.
- Engage board and auditors. Agree on judgements early to streamline assurance.
- Update annually. Materiality decisions should be revisited each reporting cycle.
COMPLIANCE STEPS
Steps to meet AASB S2 reporting expectations
- Confirm cohort + timing. Use Treasury guidance to see when your entity enters the regime.
- Build data pipelines. Set up systems for emissions, climate metrics, and qualitative disclosures.
- Coordinate disclosures. Align finance, sustainability, legal, and risk inputs in RunSustainably.
- Plan assurance. Engage auditors to review controls and evidence ahead of deadlines.
Actions if you’re unsure about S2 applicability
Run a threshold check. Compare revenue, assets, and employee numbers to the cohort definitions.
Map climate dependencies. Even if thresholds are lower, supplier or lender requests may push you to report early.
Create an escalation path. Decide who confirms compliance status and when to update the board.
GLOSSARY SNAPSHOT
AASB S2 applicability glossary snapshot
AASB S2 requirements. The disclosures required under the climate-related standard.
Materiality. Information is material if omitting it could influence investor decisions.
Cohorts. The phased groups of entities (e.g., Cohort 1 large reporters) required to report first.
FAQS
Do I need to comply with AASB S2? FAQs
Do I need to comply with AASB S2?
If you meet Treasury thresholds or fall into specified cohorts, yes. Even if optional, supply chain pressure may require S2-aligned reporting.
What are the AASB S2 reporting requirements?
Governance, strategy, risk management, metrics & targets, scenario analysis, and Scope 1-3 emissions disclosures.
How does materiality work under S2?
Focus on climate information that affects enterprise value; document judgements for assurance teams.
When do the requirements start?
Cohort 1 is expected to begin FY25/26 (subject to legislation), with subsequent cohorts phased in later.
Drova RunSustainably keeps objectives, approvals, and disclosures aligned across finance and sustainability teams.
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