Mandatory climate reporting is no longer coming. It is here.
Since 1 January 2025, Australia’s mandatory climate-related financial disclosures began under the Corporations Act 2001. Large companies required to report under Chapter 2M must now publish a Sustainability Report alongside their financial statements.
This is not a separate ESG update. The Sustainability Report forms part of your statutory reporting and consists of the climate statements, notes to the climate statements, and a directors declaration confirming compliance with AASB S2.
What does AASB S2 actually require?
AASB S2 requires disclosure of climate-related risks and opportunities that could reasonably be expected to affect cash flows, access to finance or cost of capital over the short, medium or long term.
Your climate statements must include information on governance and risk management processes, climate resilience assessments underpinned by scenario analysis, Climate Transition Plans, climate-related targets, material risks and opportunities, and Scope 1, 2 and 3 greenhouse gas emissions.
The standard is aligned to the ISSB IFRS S2 framework to ensure consistent reporting globally.
Who is in scope and when?
Reporting is phased by size and applies to your first full reporting period on or after the start date.
Group 1: reporting periods from 1 January 2025Group 2: reporting periods from 1 July 2026Group 3: first full reporting period on or after 1 July 2027
You are captured if you are a large proprietary company, a listed company meeting size thresholds, an NGER reporter, or a Responsible Superannuation Entity or Managed Investment Scheme with $5 billion or more in assets under management.
Your Sustainability Report must be lodged with ASIC within three months after year end for disclosing entities and RSEs, and within four months for other reporting entities.
Two specifics many teams miss
- Scope 3 has a one year relief. Reporting Scope 3 becomes mandatory from your second reporting period. That means Group 1 entities filing now in 2026 must include material Scope 3, and Group 2 should be building full value chain inventories in 2026.
- Assurance and penalties ramp up. The AUASB released ASSA 5000 and ASSA 5010 in January 2025 as Australia’s first sustainability assurance standards. From 1 July 2030, disclosures move to full reasonable assurance. Non-compliance penalties closely mirror financial reporting penalties, and directors may face personal liability for misleading statements. ASIC has said it will take a pragmatic and proportionate approach during the transition.
Where does MetroElectro fit?
Most teams have focused on compliance. The real opportunity is improving the numbers that will be audited.Electricity you buy is Scope 2, reported from day one, and is the easiest to cut.
At MetroElectro, we turn empty commercial rooftops into clean power with zero capex, zero disruption and zero risk for landlords and tenants. The result is lower energy costs and a stronger, auditable climate statement that directly improves your AASB S2 metrics.
If you are preparing for Group 2 or moving into Scope 3 for Group 1, we are happy to share what is working across Australian warehouses and factories.Reference article: https://www.anthesisgroup.com/au/insights/asrs-and-aasb-s2-a-guide-to-mandatory-climate-reporting-in-australia/