ASRS: Australia's Big Leap Towards Adopting the ISSB Standards

Implementing the ASRS Roadmap: Know how to begin your sustainability reporting journey

As countries around the world move towards transparency and accountability in sustainability reporting, ISSB Standards for Sustainability Disclosure, namely IFRS S1 and IFRS S2, are gaining popularity. The ISSB standards are preferred by many countries over other ESG frameworks such as TCFD and GRI as it helps tie ESG disclosures to the financial reporting of companies. These IFRS standards are designed to achieve globally comparable and consistent ESG reporting while focusing on financial materiality of ESG risks and opportunities for companies. As of mid 2025, over 30 countries are in the process of adopting IFRS-based sustainability reporting with nearly half aiming to fully adopt the IFRS S1 (sustainability-related) and IFRS S2 (climate-related) disclosures. In the APAC region, Australia is one of the leading countries along with Singapore, Japan and Hong Kong planning to adopt IFRS based sustainability reporting. The framework will be addressed as the Australian Reporting Standards (ASRS standards).

In September 2024, the Australian Accounting Standards Board (AASB) had approved the ASRS standards also known as AASB S1 (voluntary) and AASB S2 (mandatory) with an effective date of January 1, 2025. They are based on the IFRS S1 and IFRS S2, respectively. AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information and AASB S2 Climate-related Disclosures are available on the AASB Digital Standards Portal. For practical assistance about complying with their sustainability reporting obligations, the entities can refer Regulatory Guide. On specific guidance on the mandatory climate reporting, the AASB S2 Knowledge Hub has been created, which is a repository of all the necessary information which will be updated time to time.

Implementation of Roadmap for ASRS Standards for Sustainability Reporting

First annual reporting periods for ASRS report starting on or after	Large entities and their controlled entities meeting at least two of three criteria:			National Greenhouse and Energy Reporting (NGER) reporters	Asset owners
	Consolidated revenue	EOFY consolidated gross assets	EOFY employees	National Greenhouse and Energy Reporting (NGER) reporters	Asset owners
July 1, 2025 – Group 1	AUD 500 million or more	AUD 1 billion or more	500 or more	Above NGER publication threshold	N/A
July 1, 2026 – Group 2	AUD 200 million or more	AUD 500 million or more	250 or more	All other NGER reporters	AUD 5 billion assets under management or more
July 1, 2027 – Group 3	AUD 50 million or more	AUD 25 million or more	100 or more	N/A	N/A

The table above shows the mandatory implementation timeline for the 'New Climate Requirements', specifically AASB S2 based on the company's size or level or emissions. This is based on the assumption that the company is required to prepare and publish annual reports under Chapter 2M of the Corporations Act and it falls into at least one of the above-mentioned three categories. Australian government will launch a review of the climate disclosure requirement which will be led by the Treasury in conjunction with the Council of Financial Regulators.

How to get started on the ASRS report?

While abiding by New Climate Disclosures may not be mandatory this year for an issuer, it is always better to begin early. For the first attempt at the ASRS report, companies should adopt a structured step-by-step approach to tackle this monumental task efficiently.

1. Understand the Standards

Before diving into the implementation, understand the requirements of AASB S1 and S2. This involves reviewing the official guidance issued by the AASB and the ISSB Standards.

2. Conduct a Baseline Assessment

Assess the company's existing ESG sustainability reporting practices against the new ASRS standards by conducting a gap analysis and reviewing the data collection systems.

3. Establish Accountability within the Organization

IFRS S1 and IFRS S2 require strong internal governance structures; therefore, ensure that the board is actively engaged in overseeing the overall strategy, along with a designated ESG committee. Assess the need of training board members and staff in relevant departments to familiarize them with the new standards. A repository of official training materials is available on the Knowledge Hub. This will be updated time to time by the Australian government.

4. Devise Sustainability Strategy and Set Targets

Check for the physical and transitional risks associated with climate change and its financial impacts on business. ASRS standards require companies to integrate sustainability and climate issues into their corporate strategy.

So, if a company's ESG goals are not embedded into business goals, now is the time to prioritize by establishing specific measurable targets like carbon-neutrality, circular economy, green investments, etc.

5. Establish Data Collection Systems

The next step would be to review the existing data collection systems and upgrade them if necessary for compliance with ASRS standards. If possible, integrate sustainability-related data collection systems into existing financial reporting systems.

6. Disclose your Sustainability Information

Companies should publish their sustainability-related and climate-related financial disclosures concurrently with the related financial statements annually, covering the same period as their annual report. The ESG report can be published either separately or as a part of an integrated annual report along with the financials of the company.

7. Get third-party assurance

Once the report is published, it will be a continuous process. To gain the trust of investors and stakeholders, companies can also get the report audited by a third-party auditor. Repeat the process annually, monitoring progress and striving to achieve the targets.

8. Consult experts and tech-tools

For adopting AASB S2, you can refer to the Knowledge Hub and reach out to experts for guidance. Also, more tools are expected to enter the market soon to help streamline the data collection and reporting process.

Moreover, the issuers can leverage the transition reliefs over the first year of implementing ASRS Standards, such as not disclosing Scope 3 GHG emissions and not disclosing the information about a sustainability-related opportunity if that information is commercially sensitive.

Why Choose Ascentium Australia Global?

Ascentium Global offers comprehensive guidance, helping companies understand and navigate the complexities of ASRS. Our services not only ensure compliance but also the creation of long-term value through responsible and transparent business practices. To learn more about ASRS Reporting or ESG services, you can write to us at info@incorpadvisory.in or reach out to us at (+91) 77380 66622.

Frequently Asked Questions (FAQs)

International Financial Reporting Standards (IFRS) refers to a set of global accounting standards designed to promote transparency, accountability, and efficiency in financial markets worldwide. It is essentially a framework for financial reporting that ensures consistency, comparability, and clarity in the way companies report their financial performance and position.

Recently, the IFRS Foundation expanded its scope to include sustainability reporting standards, creating International Sustainability Standards Board (ISSB). The new sustainability reporting standards IFRS S1 and IFRS S2 aim to provide consistent and comparable information on Environmental, Social, and Governance (ESG) issues, much like IFRS standardizes financial reporting.

As of mid-2025, 36 countries worldwide have adopted or are in the process of adopting the IFRS Sustainability Disclosure Standards (IFRS S1 and IFRS S2), developed by the International Sustainability Standards Board (ISSB). 17 countries have finalized their approach and have published public profiles by the IFRS Foundation. These include Hong Kong, Brazil, Malaysia, Türkiye, and Nigeria. 14 of these jurisdictions aim to fully adopt the ISSB sustainability standards, while others are opting to integrate climate-focused components, such as IFRS S2, into their national frameworks. The remaining 19 countries are in various stages of consultation or preparation for adoption, indicating a growing global consensus on the importance of standardized sustainability reporting.

ASRS standards stand for the Australian Sustainability Reporting Standards which consist of the following two standards:

AASB S1 general requirements for disclosure of sustainability-related financial information—based on IFRS S1 general requirements for disclosure of sustainability-related financial information.
AASB S2 climate-related disclosures—based on IFRS S2 climate-related disclosures.

Large entities that are required to prepare and lodge annual reports under Chapter 2M of the Corporations Act will be required to disclose information about climate-related risks and opportunities. This includes listed and unlisted companies and financial institutions as well as registrable superannuation entities and registered investment schemes.
Asset owners (such as registrable superannuation entities and registered schemes) will be considered large if funds under management are more than $5 billion.
Entities that are subject to both the annual reporting requirements under the Corporations Act and emissions reporting obligations under the National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER Act) will be required to disclose, regardless of size.

Small and medium businesses, below the relevant size thresholds are exempt. Entities that are exempt from lodging financial reports under Chapter 2M of the Corporations Act, including where exemptions have been made through ASIC class orders or where the entity is registered with the Australian Charities and Not-for-profits Commission, will not be required to make climate-related financial disclosures.

The sustainability report will be subject to assurance requirements like those currently in the Corporations Act 2001 for financial reports, including the same obligations of the auditor. The AUASB also approved ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports Under the Corporations Act 2001, outlining the assurance phasing model under which the companies require limited assurance on scope 1 and scope 2 GHG emissions in the initial years followed by reasonable assurance starting July 2030.

NGER stands for National Greenhouse and Energy Reporting. Under the NGER Scheme (2007), companies that exceed any one of the following thresholds are required to report on their greenhouse gas emissions, energy production, and consumption. Two types of thresholds that determine a company’s obligation under the NGER Act 2007 are as below

Facility thresholds
Corporate group thresholds

The Facility Thresholds are:

25,000 tonnes or more of carbon dioxide equivalence (CO2-e) (scope 1 and scope 2 emissions)
Production of 100 terajoules (TJ) or more of energy, or
Consumption of 100 TJ or more of energy

The Corporate Group Thresholds are:

50,000 tonnes or more of CO2-e (scope 1 and scope 2 emissions)
Production of 200 TJ or more of energy, or
Consumption of 200 TJ or more of energy

If a corporation's group only triggers facility level thresholds, it only needs to report on those individual facilities.

Australian Securities and Investments Commission (ASIC) is the regulating body responsible for administering the mandatory climate reporting in Australia for which it has issued regulatory guidance. To support the implementation of the ESG reporting requirements, it has published a Regulatory Guide for the Application of Relief.

There are three types of relief applications available—standard applications, minor and technical applications, and novel applications. Although, the entities need to pay the fees for relief applications.

ASRS: Australia's Big Leap Towards Adopting the ISSB Standards

Implementation of Roadmap for ASRS Standards for Sustainability Reporting

How to get started on the ASRS report?

Why Choose Ascentium Australia Global?

Frequently Asked Questions (FAQs)

What is IFRS?

How many countries have adopted sustainability reporting based on the ISSB Standards?

What are the ASRS standards?

Which entities need to adopt the ASRS Standards?

Which entities are exempt from the Mandatory Sustainability Reporting?

Is assurance mandatory for the ASRS reports?

What is the NGER threshold?

What are the reliefs that entities can benefit from?

We're here to help

Namrata Motiramani

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