AASB S2: what Group 2 organisations actually need to do — and by when.
Australia's mandatory climate disclosure regime is law. Group 1 entities are already inside it. Group 2 entities — the next cohort — enter the regime for financial years beginning on or after 1 July 2026. This page is what your audit committee needs to know.
Are you Group 2?
An entity is in Group 2 if it meets at least two of the following three criteria, on a consolidated group basis, or is a controlling corporation reporting under the NGER Act, or is an asset owner with $5B+ under management.
Annual consolidated revenue threshold
Consolidated gross assets at period end
Full-time equivalent on a consolidated basis
Group 1 entities (revenue $500M+, assets $1B+, or 500+ employees) are already reporting. Group 3 entities (revenue $50M+, assets $25M+, or 100+ employees) enter the regime from 1 July 2027.
What you must disclose: the four AASB S2 pillars.
Governance
How the board and management oversee, control, and account for climate-related risks and opportunities. Charter amendments, committee mandates, accountability documentation, remuneration linkage.
AASB S2 paras 6–7Strategy
The material climate-related risks and opportunities, their current and anticipated financial effects, the scenario analysis (mandatory 1.5°C and >2°C pathways), and the transition plan.
AASB S2 paras 9–22Risk Management
The processes used to identify, assess, prioritise, and monitor climate-related risks, and how those processes integrate with overall enterprise risk management.
AASB S2 paras 25–28Metrics & Targets
Scope 1 and 2 GHG emissions from Year 1 (location-based methodology), material Scope 3 from Year 2, industry-based metrics, and climate-related targets with progress reporting.
AASB S2 paras 29–37Assurance is part of the standard. From day one.
External assurance applies from an entity's first AASB S2 reporting period. Engagements are conducted under AUASB standards ASSA 5000 and ASSA 5010 (finalised January 2025). The assurance scope escalates year over year.
Year 1 (FY27 for Group 2)
Limited assurance over Scope 1 and 2 emissions, governance disclosures, and selected strategy risks and opportunities.
Years 2–3
Limited assurance over all AASB S2 disclosures.
From 1 July 2030
Reasonable assurance over all climate-related financial disclosures. The standard required for the financial statements themselves.
The same auditor who signs off on your financial statements will also sign off on your sustainability report. Spreadsheet-based carbon tracking will not survive the review.
The legal weight of an AASB S2 disclosure.
AASB S2 is embedded in the Corporations Act 2001. False or misleading climate statements are treated as false or misleading financial statements. ASIC's Regulatory Guide 280 sets the enforcement framework. Directors sign a declaration that the report is in accordance with the Act and AASB S2, and they carry personal liability for that declaration.
Modified liability transition: 3 years on Scope 3, scenarios, transition plans. Full liability from Year 1: governance, Scope 1, Scope 2.
Group 1 is already reporting. We have read the reports.
The first wave of Group 1 sustainability reports was lodged with ASIC from late 2025. Quality varies widely. The pattern that distinguishes a defensible disclosure from a vulnerable one is consistent: the entities that started 12–18 months ahead of their reporting period — building the governance evidence trail, the GHG methodology, and the scenario framework before the reporting period began — produced reports that survived assurance. Those that compressed the work into the reporting period itself produced reports with material adjustments.
Group 2 has 6 months left to start.
A 30-minute conversation with someone who has sat in the CFO's chair.
Paula Kensington leads every executive briefing. The call is a regulatory reality check, not a sales pitch. You leave with a clear understanding of your obligations, your exposure, and what your first 60 days should look like. If we are not a fit, she will tell you that too.
Or email paula@futurevalue.global directly.