The Australian Accounting Standards Board (AASB) met to approve the final Australian Sustainability Reporting Standards (ASRD) on 20 September 2024. Companies must now align their sustainability reporting practices with these new guidelines. These standards include both voluntary and mandatory elements that will significantly shape ESG and climate-related disclosures in Australia.

Key Updates from AASB:

1. AASB S1: General Requirements for Disclosure of Sustainability-related Financial Information
   AASB S1, while voluntary, is based on IFRS S1 and offers a framework for companies to disclose broader sustainability-related financial information. For smaller companies or those new to ESG reporting, AASB S1 can provide a comprehensive foundation for improving transparency and accountability.
2. AASB S2: Climate-related Disclosures
   Effective from January 2025 for larger entities, AASB S2 is a mandatory standard under the Corporations Act, which aligns with IFRS S2 but includes additional Australian-specific requirements. It covers key elements like climate-risk assessments, scenario analysis, and detailed reporting on how climate-related risks may impact financial performance. For mid-tier companies preparing to report by 2027, aligning early with AASB S2’s framework can provide a strategic advantage, ensuring readiness when the standard becomes mandatory.

The two new standards are a monumental step forward for sustainability reporting in Australia! 

Resources: Key points PwC, AASB meeting 209