Navigating Climate-related Disclosure: What Australia’s New Standards Mean for Your Business

At Climate Logic, our mission is to help Australian businesses cut through the noise and act with purpose in the face of climate change. As sustainability consultants, we know that new reporting standards can feel like another mountain to climb. But with the right guidance, these changes are an opportunity to build a business that’s resilient, transparent, and ready for a low-carbon future.

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What Is IFRS S2? (No Prior Knowledge Needed)

IFRS S2 is a global standard for climate-related disclosures, developed by the International Sustainability Standards Board (ISSB). Its main goal is to require companies to explain how climate change could affect their business now and in the future, and to provide information that helps investors and stakeholders understand the company’s climate-related risks and opportunities.

IFRS S2 asks companies to report on four key areas:

• Governance: Who is responsible for climate-related decisions at the highest level of the business?
• Strategy: How could climate change impact your business model, financial position, and future plans?
• Risk Management: How do you identify and manage climate-related risks and opportunities?
• Metrics & Targets: What are your greenhouse gas (GHG) emissions (Scope 1, 2, and 3), and what targets have you set for reducing them?

The standard is designed to ensure that climate-related information is clear, comparable, and useful for decision-making—whether you’re an investor, regulator, or part of the community.

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Why Climate Disclosure Matters—Now More Than Ever

Australia is entering a new era of climate-related financial disclosure. The rules are changing, and so is the expectation from regulators, investors, and the community. The Australian Accounting Standards Board (AASB) has introduced AASB S2, a climate disclosure standard that’s closely aligned with the global IFRS S2, but with a uniquely Australian twist.

Let’s break down what this means for you.

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AASB S2 vs. IFRS S2: What’s the Difference?

1. AASB S2 Is Made for Australia

• Local Focus: While IFRS S2 sets the global baseline, AASB S2 is tailored for Australian entities. It’s mandatory for large businesses and financial institutions meeting certain thresholds under the Corporations Act 2001—and it kicks in for reporting periods starting 1 January 2025.
• Standalone Standard: Unlike the global approach, where IFRS S2 must be used alongside IFRS S1 (a general sustainability standard), AASB S2 is designed to stand on its own. AASB S1 is voluntary in Australia, so you can focus on climate without being swept up in broader sustainability requirements—at least for now.

2. Australian-Specific Adjustments

• Appendix D: AASB S2 includes an Australian-specific appendix to ensure it works as a stand-alone standard, capturing only what’s necessary for local compliance.
• Legislative Alignment: The requirements are embedded in Australian law, making compliance a legal obligation, not just a best practice.
• Digital Tagging: Reporting in digital formats is encouraged but remains voluntary for now, giving you time to adapt.

3. How You Measure Matters

• GHG Emissions: Both standards require disclosure of Scope 1, 2, and 3 greenhouse gas emissions, but AASB S2 leans on Australia’s National Greenhouse and Energy Reporting (NGER) Act for measurement, rather than the GHG Protocol preferred by IFRS S2. This means your emissions data should be consistent with how you already report under NGER, where practicable.
• Scope 3 Emissions: You’ll need to consider all 15 categories of Scope 3 emissions and disclose those that are material to your business—just as you would under IFRS S2.

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What Needs to Be Disclosed?

AASB S2 structures its requirements around four core themes:

• Governance: Who’s responsible for climate risk in your organisation?
• Strategy: How does climate risk and opportunity shape your business model and strategy?
• Risk Management: How do you identify, assess, and manage climate risks?
• Metrics & Targets: What are your GHG emissions (Scope 1, 2, 3), and what targets have you set for reducing them? If you use carbon credits, you’ll need to be transparent about how and why.

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The Big Picture: Why This Matters

This isn’t just about ticking boxes. Transparent, credible climate disclosure builds trust—with investors, customers, and your team. It’s about showing leadership, future-proofing your business, and playing your part in Australia’s transition to a sustainable economy.

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Summary Table: Key Differences

Feature	IFRS S2 (Global)	AASB S2 (Australia)
Effective Date	1 Jan 2024	1 Jan 2025
Legal Mandate	Varies by jurisdiction	Mandated by Corporations Act 2001
Scope	Global baseline	Australian entities meeting thresholds
GHG Measurement	GHG Protocol	NGER Act (where practicable)
Stand-alone Applicability	With IFRS S1	AASB S2 is stand-alone

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Our Perspective

At Climate Logic, we believe that intent plus effort equals momentum. If your business has the desire to transform, we’re here to help you navigate these new standards, embed sustainability into your operations, and turn compliance into opportunity. The path to a low-carbon future is complex, but with the right logic—and a little ambition—it’s one you can lead.

Ready to take action? Let’s talk about how you can meet your new climate disclosure obligations and build a better business for tomorrow.