What would climate-related disclosures look like in Australia?

The Australian Accounting Standards Board (AASB) is working on reviewing certain sustainability reporting rules (IFRS S1 and S2) and has shared some important information about how companies in Australia will disclose climate-related information.

Recently, the Australian Government announced a plan that would require many companies in Australia to disclose climate-related financial information. On 27 June 2023, the Australian Treasury released a second round of discussions, and the proposal suggests that over a three-year period, companies meeting at least 2 of the 3 criteria (these include on a consolidated basis a turnover of over $50 million, assets over $25 million and more than 100 employees) would have to report. The following table summarises the scope of application and timing defined in the proposal.

Group 1

2024-25 onwards

Group 2

2026-27 onwards

Group 3

2027-28 onwards                      

Fulfill two of the three thresholds:

  • 500 employees
  • > $1 billion consolidated assets
  • > $500 million consolidated revenue

Fulfill two of the three thresholds:

  • 250 employees
  • > $500 million consolidated assets
  • > $200 million consolidated revenue

Fulfill two of the three thresholds:

  • 100 employees
  • > $25 million consolidated assets
  • > $50 million consolidated revenue




Entities required to report under Chapter 2M of the Corporations Act that are a ‘controlling corporation’ under the NGER Act and meet the NGER publication threshold.    

Entities required to report under Chapter 2M of the Corporations Act that are a ‘controlling corporation’ under the NGER Act and meet the NGER publication threshold.    

Entities required to report under Chapter 2M of the Corporations Act that are a ‘controlling corporation’ under the NGER Act.                 

Source, Australian Treasury Consultation on Climate-related financial disclosure – 27 June 2023

The proposal also states that these companies would need to obtain assurance on their disclosures (first year, a limited assurance; later years, a reasonable assurance). The AASB’s role is to create the standards for how companies will disclose climate-related information. 

What will these standards look like?

During a meeting on 8 August 2023, the AASB has decided not to fully adopt IFRS S1. Instead, they will be developing an Australian version of the IFRS S1 that provides basic guidelines specifically for disclosing climate-related financial information. This means they will be focusing only on climate issues for now, and not broader sustainability topics.

The AASB also decided that its draft version of the climate-related financial disclosure standards will closely follow IFRS S2. However, a few deviations are already envisaged:

  • The Australian climate-related standards won’t reference the Sustainability Accounting Standards Board (SASB) in its first version.
  • This decision will be revisited after the International Sustainability Standards Board (ISSB) made the SASB industry-based standards fully international.
  • Some terms in IFRS S2 will also be changed to fit the Australian context. For example, the term “executive” will be replaced by “key management personnel” to be consistent with AASB 124 Related Party Disclosures. IFRS S1 and S2 terms will also be adjusted so that not-for-profit entities in Australia’s private and public sectors can apply the standards.

What are the implications for Australian companies?

These recent decisions make it clear that reporting on climate-related risks and opportunities is a top priority. For Australian companies that have not started reporting on environmental, social and governance (ESG) matters; a good first step is to calculate their carbon footprint.

For companies that have already done this and are currently reporting on their carbon emissions, the recent AASB decisions suggest that IFRS S2 could be a useful starting point for understanding how prepared they are to disclose climate-related financial information under the upcoming Australian standards.

 If you require assistance or would like to know more, please contact your usual Mazars advisor or alternatively our experts via the form below or on:

Brisbane – Michael Georghiou

Melbourne – Damien Lambert

Sydney – Rose Megale

+61 7 3218 3900

+61 3 9252 0800

+61 2 9922 1166

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Consultation treasury - Climate-related financial disclosure - consultation paper (treasury.gov.au)

Alert AASB - AASB Action Alert No. 224, for Meeting 197, Aug 2023

Author: Damien Lambert

Published date: 21 August 2023

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