Introduced by the Australian Accounting Standards Board (AASB) in 2024, the Australian Sustainability Reporting Standards (ASRS) reframe corporate reporting in Australia. 

If you haven’t started preparing, we recommend starting. Building the required robust systems, collecting accurate data, and embedding governance takes time. Acting now can turn compliance into strategic advantage. 

 

Why does this matter?

Global markets, regulators, and stakeholders are demanding clarity on how businesses manage climate risk. 

The ASRS aligns Australia with international standards such as IFRS S1 & S2, ensuring sustainability reporting is integrated into financial disclosures and not treated as an optional extra. 

It requires entities to disclose information about climate-related risks and opportunities that could reasonably be expected to affect company prospects i.e. cash flows, access to finance or the cost of capital over the short, medium or long term.

 

What does it mean for your business?

The two standards are: 

AASB S1 (General Requirements for Disclosure of Sustainability-related Financial Information) covering all sustainability-related risks and opportunities. NB: the application is voluntary. 

AASB S2 (Climate-relate Disclosures) covering the specific requirements for disclosing information. NB: this is mandatory for certain entities. 

In short, for businesses, this means:

• Governance: Boards must actively oversee climate risk and strategy with ownership and accountabilities formalised. 
• Strategy and risk identification: Identifying material risks and opportunities and anticipated financial effects on business strategy and the disclosure of Climate Transition Plans (CTPs). This needs to consider both your business model and value chain. 
• Risk management: Integrating the identification, assessment, prioritisation and monitoring of climate risks into your overall risk management structure. 
• Scenario analysis: Testing business resilience against multiple climate futures.
• Targets & metrics: Establishing robust process for emissions measurement, management and reporting (Scopes 1, 2, and material Scope 3) and setting clear, measurable, time bound climate targets.
• Assurance: Being audit ready, making sure disclosures meet investor-grade standards.

 

Eligibility and deadlines

With the amendment to Chapter 2M of the Corporations Act 2001, entities must prepare a sustainability report: 

1. if they are required to prepare an annual financial report under Chapter 2M and
2. meet one of the sustainability reporting thresholds under s292A.

 

Entities that meet the sustainability reporting thresholds under s292A include:

a. entities meeting at least two of the size criteria listed below (based on revenue, assets and employees); 

b. National Greenhouse and Energy Reporting (NEGR) reporters; and  

c. asset owners with value of assets above specified thresholds. 

 

• Group 1: Large entities
  • Consolidated revenue A$500m or more; consolidated gross assets A$1bn or more; 500 FTE employees or more. 
  • First reporting period starts Jan 2025, first report due June 2026.

• Group 2: Mid-sized entities
  •  Consolidated revenue A$200m or more; consolidated gross assets A$500m or more; 250 FTE employees or more.
  • First reporting period starts Jan 2026, first report due June 2027.

• Group 3: Smaller significant entities
  • Consolidated revenue A$50m or more; consolidated gross assets A$25m or more; 100 FTE employees or more.
  • First reporting period starts Jan 2027, first report due June 2028.

 

How Morelli can help

Whatever stage you’re at, we’re not just here to help you achieve compliance, we go beyond it to create real business value. Our services include:

• Gap analysis & readiness assessments – Building understanding of where you stand today and the creation of a clear pathway to compliance.
• Governance & reporting frameworks – Helping you embed climate risk into strategy, decision-making and board oversight.
• Data systems & scenario modelling – Developing reliable processes for emissions tracking and climate risk analysis.
• Assurance preparation – Getting you ready for future audit requirements and investor scrutiny.

The path to compliance doesn’t need to be challenging. Get it right, you manage risk, optimise opportunities and future-proof your business, building long term resilience and stakeholder trust. 

Ready to start your ASRS journey? Let’s talk.