What AASB S2 is
AASB S2 Climate-related Disclosures is Australia's mandatory climate reporting standard, issued by the Australian Accounting Standards Board in September 2024 and closely aligned with the ISSB's IFRS S2. It applies through the Corporations Act: in-scope entities prepare a sustainability report as part of the annual report, with a directors' declaration, lodged on the same timetable as the financial statements.
The report covers four pillars: governance, strategy, risk management, and metrics and targets. In practice that means disclosing how the board oversees climate risk, which physical and transition risks are material and what they do to the business over the short, medium and long term, how those risks are identified and managed, and greenhouse gas emissions across Scope 1, 2 and (from the second year) Scope 3. We track this as 33 discrete controls.
When it lands
Reporting phases in across three groups by size: Group 1 entities for financial years beginning on or after 1 January 2025, Group 2 from 1 July 2026, Group 3 from 1 July 2027. Most NGER reporters are captured regardless of size thresholds. If your year starts 1 July, Group 2's first reporting period is FY27, reported in 2027, which makes this year the practical window to close gaps. Details and thresholds are in who must report.
The parts that take the longest
Two requirements consistently dominate the preparation timeline. Scenario analysis requires assessing resilience under at least two futures, including one consistent with 1.5°C and one high-warming scenario, with every assumption documented. And Scope 3 requires an emissions inventory that reaches into your value chain, which for most operators means building a data pipeline that doesn't exist yet.
There is a modified liability regime for the first years of the scheme. Forward-looking statements like scenario analysis and Scope 3 estimates carry limited immunity from private actions initially, but assurance requirements scale up over time toward reasonable assurance of the full report. Numbers that can't be traced to source documents will not survive that trajectory.
Where to start
Start with a gap analysis: score what you have today against every control, assign each gap an owner, and sequence the work back from your first reporting period. The free readiness check gives you a first cut in five minutes; ComplianceAgent runs the full scored analysis from your actual documents in hours.