On September 9th, Australia’s House of Representatives voted to pass the Treasury Laws Amendment Bill, which sets out new climate-related financial reporting requirements for entities. Starting on January 1, 2025, a phased-in implementation over the next three years means over 6,000 entities will eventually be required to report disclosures. Ahead of the January deadline, here is an overview of the reporting standards and the requirements for companies in-scope for reporting.
What Are the Australian Sustainability Reporting Standards?
The Australian Sustainability Reporting Standards are currently broken into two standards:
- AASB S1 (General Requirements for Disclosure of Climate-related Financial Information): A voluntary standard aligned to IFRS S1 that provides general requirements for sustainability reporting and addresses sustainability-related financial disclosures in general.
- AASB S2 (Climate-related Disclosures): A mandatory standard aligned to IFRS S2 that requires financial disclosures on climate-related risks and opportunities along the four pillars of governance, strategy, risk management, and metrics and targets.
These new standards continue to build on the global convergence work established by the IFRS S1 and S2 standards. In 2023, 75% of ASX200 companies either committed to or had already started reporting against the TCFD framework. Since the incorporation of the TCFD into the ISSB Standards, this will help ease the transition as more entities come into scope of the ASRS.
Who Is Subject to the ASRS?
The ASRS apply to disclosing entities incorporated or formed in Australia. Both large listed and unlisted companies, registered schemes, registrable superannuation entities, and disclosing entities may be required to disclose under the ASRS if they are subject reporting under the Corporations Act 2001. Generally, if entities are not subject to reporting under the Corporations Act, they are exempt from sustainability reporting.
This includes companies that meet two of the three criteria outlined below, and are registered NGER corporations and entities with assets of $5 billion or more at the end of the financial year. These disclosures are being applied in a phased approach to allow companies time to adjust to the new data collection and requirements. The table below provides an overview of the entities subject to reporting under the ASRS as well as the phase-in timeline for reporting.
| Entities that are subject to reporting under the Corporations Act 2001 and are one of the following: | |||||||
| Reporting period on or after | Large listed and unlisted companies that fulfill at least two of the three criteria: | National Greenhouse and Energy Reporting (NGER) reporters | Asset owners (Registered schemes, registerable superannuation entities, or retail CCIVs) | ||||
| Consolidated revenue | Consolidated gross assets | Employees (FTE) | |||||
| Group 1 | January 1, 2024 | ≥$500 million | ≥$1 billion | ≥500 | NGER reporters that meet a publication threshold | N/A | |
| Group 2 | July 1, 2026 | ≥$200 million | ≥$500 million | ≥250 | All NGER reporters | ≥$5 billion (assets under management) or they meet 2 of the 3 criteria for Group 2 | |
| Group 3 | July 1, 2027 | ≥$50 million | ≥$25 million | ≥100 | N/A | ≥$5 billion (assets under management) or they meet 2 of the 3 criteria for Group 3 | |
What Entities Need to Report
Under the Australian Sustainability Reporting Standards, an annual sustainability report consists of three parts:
The climate statement
This includes the entity’s material climate-related risks and opportunities, metrics and targets related to climate, including GHG emissions, and climate-related governance or risk management, controls, or procedures.
Notes (to the climate statement or otherwise)
- Any notes required by the sustainability standards regarding the preparation and contents of the climate statement and other matters concerning environmental sustainability
- Any disclosures required by a legislative instrument of the Minister regarding the preparation of and contents of the climate statement and other matters concerning environmental sustainability
The directors’ declaration about the statements and notes
This is a signed and dated declaration that confirms the statements made are in compliance with the Corporations Act and the relevant sustainability standard (AASB S2).
How Novata Can Help Prepare for Reporting
With Novata, companies across the private markets have access to a powerful platform built specifically to address the complexities of compliance, driving interoperable reporting across multiple standards, frameworks, and regulations, and helping drive long-term resilience and sustainable performance for their organizations.
For companies in-scope for reporting, the AASB S2 standard is now available in the Novata platform. Our digital platform is purpose-built to align with the ASRS and other disclosure standards and provides a seamless solution for data collection and management. Novata’s tools enhance transparency, data integrity, and accuracy, supporting all aspects of your reporting processes and meeting assurance requirements with ease.
As trusted advisors to organizations worldwide, Novata’s team brings extensive experience supporting companies through this new era of sustainability reporting. We’re here to help your business meet compliance needs while building a foundation for sustainable growth.
