Short answer: the ASRS reporting requirements make large and mid-sized Australian entities publish an annual sustainability report with climate statements prepared under AASB S2 Climate-related Disclosures. Group 1 started with financial years beginning on or after 1 January 2025, Group 2 with financial years beginning on or after 1 July 2026, and Group 3 starts with financial years beginning on or after 1 July 2027. An entity is in a group if it meets two of three size tests (revenue, gross assets, employees), or meets the emissions or asset tests.
For a mid-market company the practical question is not the standard itself but the data: Scope 1 and 2 emissions you can trace to source, a defensible Scope 3 estimate, and governance and risk information that the board will sign. This guide sets out who must report and when, what has to be disclosed, and how to get the numbers out of the systems you already run.
What is ASRS?
"ASRS" is the common name for the Australian Sustainability Reporting Standards issued by the Australian Accounting Standards Board (AASB). There are two:
- AASB S2 Climate-related Disclosures is mandatory for entities that must prepare a sustainability report.
- AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information is voluntary.
Both are based on the ISSB's IFRS S1 and S2. The obligation to report sits in the Corporations Act (inserted by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024), and ASIC administers it. ASIC's Regulatory Guide 280 explains how it interprets and enforces the rules.
Who has to report under ASRS?
You must prepare a sustainability report if you prepare an annual financial report under Chapter 2M of the Corporations Act and meet one of these thresholds:
- Size: the entity and the entities it controls meet two of the three tests for revenue, gross assets and employees (table below).
- Emissions: the entity is a registered corporation with reporting obligations under the National Greenhouse and Energy Reporting Act 2007 (NGER).
- Assets: for registered schemes, super funds (RSEs) and retail CCIVs, the value of assets meets the threshold ($5 billion or more for Group 2).
ASRS Group 1, 2 and 3 thresholds and start dates
| Group | Meets two of three tests | Reporting starts for financial years beginning |
|---|---|---|
| Group 1 | Revenue $500m or more; gross assets $1b or more; 500 or more employees | On or after 1 January 2025 |
| Group 2 | Revenue $200m or more; gross assets $500m or more; 250 or more employees | On or after 1 July 2026 |
| Group 3 | Revenue $50m or more; gross assets $25m or more; 100 or more employees | On or after 1 July 2027 |
NGER registered corporations that meet the NGER publication threshold are in Group 1 and other NGER registered corporations are in Group 2. Registered schemes, super funds and retail CCIVs with assets of $5 billion or more are in Group 2; smaller ones are in Group 3 only if they meet two of the three size tests. RG 280 has the full table.
Who does not have to report?
According to ASIC, entities that do not prepare annual financial reports under Chapter 2M are outside the regime. That includes small proprietary companies with no Chapter 2M obligation, foreign companies registered under Division 2 of Part 5B.2, and registered charities that do not report under Chapter 2M.
Group 3 entities that conclude they have no material climate-related risks or opportunities can lodge climate statements saying so and explaining how they reached that view.
Why smaller suppliers are affected anyway
If you sell to a Group 1 or Group 2 company, its Scope 3 figure includes emissions in its supply chain. Expect customers to ask for your energy use, fuel use or emissions, and for that request to show up in tenders and supplier questionnaires.
What must an ASRS report contain?
Under the Corporations Act the sustainability report is made up of the climate statements, any notes, and a directors' declaration. The climate statements must disclose:
| Area | What you disclose |
|---|---|
| Governance | How the board and management oversee climate-related risks and opportunities |
| Strategy | Material climate-related risks and opportunities, and their effect on the business model, strategy and financial position |
| Climate resilience | Scenario analysis using at least two scenarios: 1.5°C of warming, and warming well exceeding 2°C, above pre-industrial levels |
| Risk management | How climate risks are identified, assessed and managed, and how that fits the wider risk process |
| Metrics and targets | Scope 1, Scope 2 and Scope 3 greenhouse gas emissions, other metrics AASB S2 requires, and any climate targets |
Scope 1, 2 and 3 emissions
- Scope 1 is direct emissions from sources you own or control: fuel in boilers, generators and company vehicles, process emissions and refrigerant leaks.
- Scope 2 is indirect emissions from the electricity, heating or cooling you buy.
- Scope 3 is everything else in your value chain, upstream and downstream, across the GHG Protocol's 15 categories, such as purchased goods and services, transport, business travel, use of sold products and investments.
For Australian activity data, the federal climate change department publishes the National Greenhouse Accounts Factors each year, which most Australian calculations use for Scope 1 and 2.
Scope 3 relief and estimation
Three points from ASIC's RG 280 matter most to a first-time reporter:
- First-year relief. You do not have to disclose Scope 3 emissions or comparative information in the first annual reporting period in which you apply AASB S2.
- Estimates are allowed. AASB S2 expects Scope 3 to include estimation and allows secondary data such as industry averages. You must use reasonable and supportable information available without undue cost or effort, and accuracy is expected to improve over time. Spend-based estimates are a common starting point for that reason.
- Modified liability. For financial years beginning between 1 January 2025 and 31 December 2027, statements about Scope 3 emissions, scenario analysis and transition plans are protected statements: only ASIC or criminal proceedings can be brought over them, not private actions.
ASRS timeline: assurance, lodgement and directors' declaration
| Item | What the rules say |
|---|---|
| Lodgement | Within three months of year end for disclosing entities, RSEs and registered schemes; within four months for other reporting entities |
| Assurance | Phased in. For financial years starting before 1 July 2030, review or audit to the extent the AUASB requires (the AUASB publishes the timetable). From 1 July 2030, the full report must be audited |
| Directors' declaration | For financial years starting between 1 January 2025 and 31 December 2027, directors declare the entity has taken reasonable steps to ensure the report complies. After that, they declare that it complies |
What should mid-market companies look for in ASRS compliance software?
Most Group 2 and Group 3 companies will use some kind of carbon accounting or ESG reporting platform. Before you choose one, check that it can:
- Pull data from your own systems (ERP or accounting software, utility bills, fleet cards, travel bookings) rather than relying on spreadsheets re-keyed each year.
- Apply the right factors: National Greenhouse Accounts Factors for Australian Scope 1 and 2, and a documented method for Scope 3.
- Support spend-based Scope 3 from your general ledger, with a way to swap in supplier-specific data as it becomes available.
- Keep an audit trail from each reported number back to the source document, because assurance is being phased in.
- Structure the output to AASB S2: governance, strategy, scenario analysis, risk management, metrics and targets.
The software is only as good as the data behind it. The two most common gaps we see are activity data that lives in suppliers' invoices rather than in structured fields, and a chart of accounts that does not separate spend in a way that maps to Scope 3 categories. Both are fixed in your ERP and accounting setup, not in the ESG tool.
How to get ready: a checklist
Governance
- Agree who on the board and in management owns climate risk
- Fold climate risk into the existing risk register and reporting
Data
- Collect electricity, gas and fuel use for every site and vehicle, with the source documents
- Map your chart of accounts and supplier spend to Scope 3 categories
- Identify your largest suppliers and what emissions data they can provide
Calculation
- Calculate Scope 1 and 2 using current National Greenhouse Accounts Factors
- Produce a first spend-based Scope 3 estimate and document the method
- Keep the calculation reproducible so an auditor can follow it
Reporting
- Run scenario analysis on at least the two required scenarios
- Draft disclosures under each AASB S2 area and test them with your auditor early
Where to start
Confirm which group you fall into and when your first reporting period begins. If that is Group 2, you are already in your first reporting year; if Group 3, your first year starts on or after 1 July 2027. Then get your Scope 1 and 2 data into a form that can be traced back to source and set up your ledger so a Scope 3 estimate falls out of it.
Our ESG reporting service does exactly that work: scoping your obligations and setting up the data collection in your ERP and accounting systems so the numbers hold up to assurance. If you are also replacing or upgrading those systems, see ERP selection. Talk to us about where your data stands today.