Article Posted date
30 August 2024
Reporting Update 24RU-11
The first Australian Sustainability Reporting Standards (ASRS) are close to finalisation after the Australian Accounting Standards Board (AASB) discussed final working drafts at its meeting on 26 August 2024 comprising:
- AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information – a voluntary Standard
- AASB S2 Climate-related Disclosures – a mandatory Standard.
AASB S1 and AASB S2 will be effective from 1 January 2025 and are applicable for both profit and not-for-profit entities.
AASB will issue the final standards once the Climate-related financial disclosures Bill is passed by the House of Representatives (scheduled to sit in the week beginning 9 September 2024 – the earliest the Bill can be finalised).
What are the key differences to ISSB Standards?
- Scope: AASB S1 is a voluntary standard on general requirements for sustainability-related financial information while AASB S2 is a mandatory standard on climate reporting in line with the recently Senate-approved Climate-related disclosures Bill (see 24RU-10 Climate-related financial disclosures Bill passed)
- Application: AASB S1 and AASB S2 apply to both for-profit and not-for-profit entities
- AASB S1: Apart from being a voluntary standard, no differences. Incorporates all IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information requirements without modification
- AASB S2:
- General requirements for disclosure: incorporates selected content from AASB S1 (general requirements for disclosure) necessary to make AASB S2 function as the standalone standard for all climate-related financial disclosures. That content is included in Appendix D of AASB S2.
- Industry-based information: no requirement to consider or disclose industry-based metrics or the Sustainability Accounting Standards Board
(SASB) Standards.
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We have consistently supported globally aligned sustainability standards. These first two Australian Sustainability Reporting Standards will strengthen the ability of Australian entities to participate on the international stage. We congratulate all stakeholders that worked together to realise this achievement in such a short time. The stage is now set in Australia for mandatory climate-related financial disclosures with the parliamentary process poised to finalise the legislative mandate; the AASB to finalise these first sustainability standards; and the AUASB to complete its consultations on the related assurance roadmap.
Next steps
- Get familiar with the standards.
- Follow the issuance of final standards by the AASB expected in September 2024.
- Follow the finalisation of the legislation and understand how it applies to you.
- Start planning – perform gap analysis and create a roadmap to identify capacity constraints.
- Reach out to KPMG contact during planning process.
- Be alert for guidance and relief issued by ASIC, the regulator responsible for administering the legislation mandating preparation of sustainability reports.
