Understanding Australia’s Mandatory Climate Reporting Framework
Australia’s Mandatory Climate Reporting framework aligns with global sustainability disclosure standards and introduces a new level of transparency for reporting entities. Developed in line with the International Sustainability Standards Board (ISSB) and International Financial Reporting Standards (IFRS), the regime embeds climate-related financial disclosure obligations into the Corporations Act 2001 (Cth) through the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill. The legislation mandates sustainability reporting for eligible entities, embedding ESG accountability within Australia’s financial reporting landscape.
From financial years commencing on or after 1 January 2025, relevant entities are required to prepare climate-related statements under AASB S2, issued by the Australian Accounting Standards Board (AASB). These standards establish a consistent national approach to climate-related disclosures across governance, strategy, risk management, and performance indicators. They aim to improve comparability and transparency in financial reporting.
Thresholds for mandatory reporting are determined by consolidated revenue, EOFY consolidated gross assets, and employee numbers, with phase-in periods through to 2027. Entities meeting these thresholds, or those connected through the supply chain to Group 1 reporters, must maintain accurate sustainability records and prepare sustainability-related financial information that captures material climate risks.
Acumentis helps reporting entities understand which reporting thresholds apply, interpret new obligations under AASB S2, and prepare compliant sustainability reports that reflect material climate-related risks and ensure consistent climate disclosures across their operations while meeting their sustainability reporting obligations under the ASRS framework.
Mandatory Climate Reporting is becoming a critical business consideration in Australia.
With the introduction of the Australian Sustainability Reporting Standards (ASRS) on 1 January 2025, mandatory reporting requirements for climate-related risks and opportunities are now rolling out.
| Number of Employees | Consolidated Gross Assets | Consolidated Revenue | AND | NGER Act Reporters | Asset Owners** | |
| Group 1 (1st Jan 2025 Onwards)* | 500+ | $1 B+ | $500 M+ | Above NGER publication threshold | Not applicable | |
| Group 2 (1st July 2026 Onwards) | 250+ | $500 M+ | $200 M+ | All other NGER reporters | Assets under management $5 B+ | |
| Group 3 (1st July 2027 Onwards) | 100+ | $25 M+ | $50 M+ | Not applicable | Not applicable | |
| ← 2 out of 3 required → | ||||||
* Subject to when the Bill passes through the Australian Parliament, the new requirements are expected to apply to reporting entities from financial years starting on or after 1 January 2025.
** Asset owners (which are registered schemes, registrable superannuation entities or retail corporate collective investment vehicles with assets of $5b or more) will be a Group 2 entity even if they would otherwise meet the Group 1 size test.
These mandatory disclosures will be introduced in phases, with reporting obligations across three groups based on company size, revenue and emissions profile. While only certain companies are required to report initially, all businesses will be impacted. Even if your organisation isn’t directly subject to ASRS reporting, you may be part of the supply chain for a reporting entity and asked to provide ESG-related (Environmental, Social and Governance) data to support their disclosures.
To help navigate this transition, Acumentis has established a dedicated Climate Reporting team to support business with ASRS compliance and broader sustainability integration.
Whether you’re just beginning your ESG journey or already tracking these metrics, our team can provide tailored support to help guide you through each stage of implementation.
Our Mandatory Climate
Disclosure Services
Navigating ESG and ASRS reporting doesn’t have to be overwhelming.
The Acumentis ESG team helps you translate complex disclosure requirements into practical, actionable insights that align with your business goals.
Our services include:
- Climate Disclosure & Compliance Advisory
- Resilience Modelling & Climate Scenario Advisory
- Environmental, Social & Governance Advisory
- Climate & Nature Assurance
- Climate & Urban Resilience Advisory
- Carbon Farming & Natural Capital Advisory
Whether you’re uncertain where to start or preparing to submit your first climate-related disclosure, we’ll help you build a clear, compliant roadmap toward sustainability reporting maturity.
Book your ASRS Readiness Consultation today and start building confidence in your climate and sustainability reporting.
Practical Guidance for ASRS-Ready Organisations
Meeting mandatory climate reporting rules requires more than awareness. It demands data integrity, governance, and strategic planning. Acumentis helps organisations establish robust risk management frameworks, perform gap analyses, and implement systems to track and report climate-related financial disclosures accurately.
Our ESG team works with boards, executives, and sustainability officers to:
- Conduct scenario analysis and stress testing for climate-related risks and opportunities
- Identify and document material climate risks affecting assets, operations, and supply chains
- Develop controls and assurance processes to support financial statements and directors’ declarations
- Prepare for reasonable assurance reviews under Assurance Standards Board guidance
- Integrate climate disclosures within annual reports in line with Australian Accounting Standards Board expectations
We provide practical guidance for maintaining sustainability records, meeting Commonwealth climate disclosure requirements, and embedding ESG performance into business strategy. Whether you’re starting to prepare sustainability reports or verifying data ahead of your first auditor’s report, Acumentis delivers strategic, evidence-based support every step of the way.
Frequently Asked Questions
ESG stands for Environmental, Social, and Governance and is a framework used to evaluate how a business manages sustainability risks and opportunities.
The Australian Sustainability Reporting Standards (ASRS) are a new set of mandatory reporting requirements that define how Australian companies must disclose their climate-related financial risks, greenhouse gas emissions, and sustainability strategies.
The new Australian Sustainability Reporting Standards (ASRS) came into effect 1 January 2025.
ESG reporting will be rolled out in a staged approach with reporting obligations phased in across three groups based on company size, revenue and emissions profile. See table below for timeline;
| Group 1 | First annual reporting period beginning on or after 1 January 2025 |
| Group 2 | First annual reporting period beginning on or after 1 July 2026 |
| Group 3 | First annual reporting period beginning on or after 1 July 2027 |
Whilst ESG reporting requirements start with big businesses, those businesses will now be required to report on their entire supply chain.
That means your emissions, energy use, and sustainability efforts are part of their climate report, and you may be required to provide ESG-related data to support their disclosures.
A three-phased approach to implementation will apply based on the following thresholds (to determine which group you fall into, you must fulfil at least 2 out of the 3 requirements below);
| Number of Employees | Consolidated Gross Assets | Consolidated Revenue | |
| Group 1 (1st Jan 2025 Onwards) | 500+ | $1 B+ | $500 M+ |
| Group 2 (1st July 2026 Onwards) | 250+ | $500 M+ | $200 M+ |
| Group 3 (1st July 2027 Onwards) | 100+ | $25 M+ | $50 M+ |
| AND |
| NGER Act Reporters | Asset Owners** |
| Above NGER publication threshold | Not applicable |
| All other NGER reporters | Assets under management $5 B+ |
| Not applicable | Not applicable |
Under the new ASRS, businesses report on four core areas – Governance, Strategy, Risk Management, and Metrics & Targets. A detailed table of the voluntary and mandatory reporting requirements follows;
ASRS S1 – Sustainability-related Disclosures (Voluntary)
| Category | Reporting Requirements |
|---|---|
| Conceptual Foundations | Disclose material information fairly; ensure consistency with financial statements and present information clearly and cohesively. |
| Core Content | Governance: Disclose, processes, controls, and procedures for managing sustainability-related risks and opportunities (SROs). Strategy: Describe the approach to managing SROs. Risk Management: Disclose processes for how SROs are identified, evaluated, and monitored. Metrics & Targets: Report performance and progress toward sustainability objectives or legal obligations. |
| General Requirements | Include references used, where and when disclosures are made, comparative data, and a declaration of adherence to the standard. |
| Judgements, Uncertainties & Errors | Disclose information about judgements made in preparing sustainability-related financial disclosures and significant measurement uncertainties affecting reported figures. Where an error was made in prior periods, correct it by restating the figures. |
ASRS S2 – Climate-related Disclosures (Mandatory)
| Category | Reporting Requirements |
|---|---|
| Governance | Describe the systems and controls in place for managing climate-related financial risks and opportunities. |
| Strategy | Detail climate-related risks and opportunities, and their impacts on business operations and financial outcomes, and include scenario planning and transition strategies. |
| Risk Management | Explain how climate risks are identified, assessed, and integrated into broader business risk frameworks. |
| Metrics & Targets | Report climate-related indicators (e.g., Scope 1 & 2 emissions from the start; material Scope 3 emissions from year two) and any climate targets established. |
No. While emissions are a major component, the ASRS also require disclosure of climate-related risks, opportunities, transition plans, and resilience strategies.
Broader ESG reporting extends even further, covering social impact, governance, and ethical operations.
Not only does ESG reporting help your business prepare for the future by identifying and managing risks and opportunities related to environment and social impact, improving cost efficiency and long-term resilience, it also helps you to build trust and transparency with investors and stakeholders, enhancing your reputation and brand.
Preliminary ASRS Readiness Assessment
Start your ESG journey with confidence.
Not sure where you stand on ASRS readiness? This quick pulse check helps pinpoint your current position and how Acumentis can support your next steps.