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.
| 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 | |||
| 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.
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.
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.
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