Following the introduction of mandatory climate-related financial disclosures under Australian Sustainability Reporting Standard (ASRS), issued by the Australian Accounting Standards Board (AASB), the first wave of AASB S2-aligned reporting practices is now emerging.
The introduction of AASB S2 represents a significant shift in Australian corporate reporting, placing climate-related financial disclosures within the domain of investor focused, comparable disclosure, alongside traditional financial reporting information. While early reporting practices vary in maturity, the first cohort of reporting entities provides a clear indication of where future reporting entities should focus their efforts.
We have reviewed 23 ASX-listed1 Group 1 entities that have already published Sustainability Reports in accordance with the new requirements.
This report analyses these early disclosures across the four core pillars of AASB S2 - Governance, Strategy, Risk Management, and Metrics and Targets - to assess how entities are interpreting and applying the Standard in its first year of mandatory adoption. While transitional relief applies and reporting maturity varies, these early disclosures provide valuable insight into emerging practices and areas requiring further development.
Key early findings
Prior climate reporting experience matters
Entities with previous alignment to the TCFD framework (particularly in the energy and resources sectors) demonstrate stronger preparedness and more mature disclosures.
Reliefs are widely used, but there is a level of early ambition
Although first‑year transition relief is available, several early reporting entities went beyond minimum requirements. 22% disclosed comparative periods and 35% disclosed Scope 3 emissions, suggesting a level of preparedness and early ambition, particularly in emissions‑intensive sectors.
Climate-related risks are well covered, opportunities less so
While physical and transition risks are consistently disclosed, nearly 20% of reporting entities do not clearly articulate climate-related opportunities, reducing investor insight into resilience and growth potential.
Net-zero targets are common but vary in robustness
Although AASB S2 does not require entities to set net‑zero targets, almost 70% of reporting entities have done so, demonstrating a strong level of ambition among early adopters, with approximately half of these companies (eight in total) currently relying on carbon offsets to some extent.
Comparability and clarity remain crucial
Variability in report structure, scope and presentation continues to limit comparability, reinforcing the importance of clear, focused and integrated disclosures for investors. However, AASB S2 is a significant step forward compared to the level of comparability of voluntary disclosures.