The Australian Sustainability Reporting Standards (ASRS) will roll out in three phases from 2025 to 2027, with new legal requirements to disclose climate-related risks, governance, and emissions.
This guide outlines what mid-market companies need to know about who must report, what must be disclosed, and when compliance starts under the Australian Accounting Standards Board (AASB) Standard S2 – Climate-related Disclosures.
Who Must Prepare a Sustainability Report?
A company must report under the ASRS if it:
- Prepares annual financial reports under Chapter 2M of the Corporations Act 2001, and
- Meets two or more sustainability thresholds, such as:
- Total consolidated revenue
- Gross consolidated assets
- Number of employees
- Registration under the National Greenhouse and Energy Reporting (NGER) scheme
The thresholds vary by group, and most large proprietary companies, NGER reporters, and asset managers will be affected. Even if your business isn't immediately in scope, you may need to align with customers or investors who are.
ASRS Compliance Timeline: When Each Group Must Start
| Group | First Financial Year Starting | First Report Due |
|---|---|---|
| Group 1 | 1 January 2025 | Financial year ending 2025–26 |
| Group 2 | 1 July 2026 | Financial year ending 2026–27 |
| Group 3 | 1 July 2027 | Financial year ending 2027–28 |
Core Disclosure Requirements (All Groups)
All in-scope entities must report under AASB S2 – Climate-related Disclosures, which is aligned with the international IFRS S2 standard and the Task Force on Climate-related Financial Disclosures (TCFD).
Disclose who oversees climate risk (board, committee or management) and how oversight is structured.
Explain how climate-related risks and opportunities affect your business model, operations, and cash flows – including scenario analysis.
Describe how climate risk is identified, assessed and integrated into your enterprise risk framework, ideally aligned with ISO 31000.
Report Scope 1 & 2 emissions from year one, Scope 3 from year two. Include climate-related targets and progress.
All disclosures must be included in the annual report, supported by a director's declaration, and subject to independent assurance.
Group-Specific Requirements
From 1 January 2025
Thresholds:
- $500 million revenue
- $1 billion in assets
- 500 employees
- NGER reporters above the publication threshold
Reporting:
Full compliance with AASB S2 from year one, including detailed scenario analysis, emissions disclosures (Scopes 1, 2, and material Scope 3), and quantitative and qualitative risk disclosures.
From 1 July 2026
Thresholds:
- $200 million revenue
- $500 million in assets
- 250 employees
- NGER reporters and asset owners with > $5 billion under management
Reporting:
Same requirements as Group 1. Most mid-market companies captured here will need to accelerate climate capability and systems readiness by FY26.
From 1 July 2027
Thresholds:
- $50 million revenue
- $25 million in assets
- 100 employees
Reporting:
Core AASB S2 requirements apply. However, if the business concludes that it has no material climate-related risks or opportunities, it may submit a statement of non-materiality with explanation.
Assurance Requirements Under ASRS
- Year 1: Limited assurance required for emissions and core governance content
- By 2030: Reasonable assurance expected for most disclosures
- Assurance must comply with Australian Auditing and Assurance Standards Board (AUASB) guidelines – namely ASSA 5000 and ASSA 5010
Director Responsibilities and Enforcement
- The Australian Securities and Investments Commission (ASIC) has stated it will take a "pragmatic" enforcement approach during the transition
- Directors remain legally liable for misleading climate statements
- Penalties include: Up to $15 million or 10% of annual turnover
- Personal director liability for lack of due diligence
What Mid-Market Leaders Should Do Now
If your business is in Group 2 or Group 3, 2024 is your window to get ahead.
Here's how to start:
- Know your group and compliance date
- Educate your board and C-suite on governance, liability and strategic risk
- Conduct an ASRS gap assessment – governance, risk, emissions and data
- Develop your climate scenario analysis and emissions forecasting capability
- Plan for assurance readiness in line with AUASB standards