AASB S2, Australia’s mandatory climate disclosure standard, is IFRS S2 with four changes made by the Australian Accounting Standards Board (AASB), a few version pins, and a layer of Australian law around it. This AASB S2 vs IFRS S2 comparison covers each change and what it means for a group that already reports under IFRS S2. The AASB lists the four changes in paragraph BC14 of its Basis for Conclusions:
The AASB decided to issue two Australian Sustainability Reporting Standards, as described below:
(a) the voluntary Standard AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information, to incorporate all IFRS S1 requirements without modification … ; and
(b) the mandatory Standard AASB S2 Climate-related Disclosures, to incorporate all IFRS S2 requirements, with modifications only in respect to the following matters:
(i) general requirements for disclosure of climate-related financial information;
(ii) options under the legislative amendments regarding consolidated reporting;
(iii) consideration and disclosure of industry-based information; and
(iv) users of a not-for-profit entity’s general purpose financial report (GPFR).
(AASB S2 Basis for Conclusions BC14)
Apart from these four modifications and a few version pins, AASB S2 is IFRS S2 word for word. The core physical-risk paragraphs are unchanged, so IFRS S2 work on them carries over. Australian law adds rules around them, most of all a minimum set of scenarios.
| Dimension | IFRS S2 | AASB S2 | What this means for IFRS S2 reporters |
|---|---|---|---|
| Physical-risk paragraphs (Para 22, 25, 29(c), 29(e), App B B1-B18) |
Base text | Word for word; B65(d) deleted; “latest international agreement” names the Paris Agreement | Analysis carries over; add the two legal minimum scenarios |
| Modification 1: Disclosure mechanics | IFRS S1, applied alongside IFRS S2 | Appendix D inside AASB S2, same paragraph numbers | Cite AASB S2 Appendix D; publish with the financial statements |
| Modification 2: Reporting entity | Same reporting entity as the financial statements (IFRS S1 para 20) | Each entity reports for itself; an Australian parent may elect to report for its group (s292A(2)) | Para 29(c) numerator and denominator follow the reporting entity |
| Modification 3: Industry-based information | Refer to and consider the Industry-based Guidance (paras 12, 23, 37); disclose industry-based metrics (para 32) | Nine items deleted; three replacements keep the cross-industry metric duty | Cross-industry Para 29(c) unchanged; AASB intends to finalise industry-based requirements by 2030 |
| Modification 4: NFP user definitions | Investors, lenders and other creditors | AusA1, AusB14.1 and AusB15.1 add parliaments, taxpayers, donors and service recipients | Commercial reporters: no change. NFP reporters: a wider set of users for materiality |
| Scenario analysis | Entity chooses its scenarios | At least two by law: one limited to 1.5°C, one well exceeding 2°C (s296D(2B)) | Check your scenario set before reusing it |
| Law around the standard | Set by each adopting jurisdiction | Corporations Act Chapter 2M (s292A, s296D(2B), s1707D), ASIC RG 280, ASSA 5010 | Sets who reports, the scenario minimum, the liability window and assurance |
Next read
AASB S2 Group 1, 2, and 3: When Each Group Must Report walks the year-end-to-disclosure-date mapping plus the three Appendix C transitional reliefs for first-year reporters.
The physical-risk paragraphs in AASB S2 match IFRS S2 word for word
Para 22 (scenario analysis), Para 25 (risk management), Para 29(c) (assets vulnerable to physical risks), Para 29(e) (capital deployment) and Appendix B paragraphs B1 to B18 are the same in both standards. Your IFRS S2 work on them carries over, including the choices behind Para 29(c) covered in our IFRS S2 Para 29(c) deep-dive and the Para 22 scenario analysis walkthrough.
Two related items differ. AASB S2 defines “the latest international agreement on climate change”, a term Para 22 uses, as the Paris Agreement. And AASB S2 deletes B65(d) from the guidance on preparing Para 29(c) (see Modification 3).
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Modification 1: Appendix D brings the IFRS S1 requirements into AASB S2
IFRS S2 is applied together with IFRS S1, which sets the general requirements: materiality, fair presentation, the reporting entity and timing. In Australia, AASB S1 is voluntary, so the AASB put the IFRS S1 content that AASB S2 needs into Appendix D of AASB S2 (BC20).
- Materiality. Appendix D keeps the IFRS S1 paragraph numbers. The materiality definition is paragraph 18 and the requirement to disclose material information is paragraph 17. Only the name of the standard you cite changes.
- Timing. Appendix D leaves out the IFRS S1 Appendix E transition reliefs, including the one that lets a first-year reporter publish climate disclosures after its financial statements. Under AASB S2, paragraph 64 of Appendix D requires the disclosures at the same time as the financial statements.
AASB S1 vs S2: What’s the Difference and Which Do You Need? Plain-language walk through Appendix D, the voluntary AASB S1 election, and when each standard makes sense.
Modification 2: who reports, and the group election under section 292A
Under IFRS S2, the climate disclosures cover the same reporting entity as the financial statements (IFRS S1 paragraph 20).
Under section 292A of the Corporations Act, each entity that meets the reporting tests prepares its own sustainability report. A parent that must prepare consolidated financial statements can elect to report for the whole group, and then only the parent reports. AASB S2 adds Aus20.1 and AusB38.1 to fit this rule.
This changes Para 29(c), because the amount and percentage of vulnerable assets are measured for the reporting entity. A group reporting under both regimes can end up with two different percentages, both correct. Name the reporting entity in the Australian report so readers can reconcile them.
A foreign parent cannot make the group election. Each Australian subsidiary that meets the tests files its own report, even if the parent already publishes an IFRS S2 report. The exceptions are when an Australian parent in the group elects to report for its part of the group, or ASIC grants relief (RG 280.46 and RG 280.191). In its September 2026 review, ASIC found that subsidiaries of multinational groups did not always explain how group governance and risk management applied locally.
Modification 3: AASB S2 removes the industry-based requirements
AASB S2 deletes nine IFRS S2 items. Eight are tied to the ISSB’s Industry-based Guidance (BC28). Five are removed outright: Para 12, Para 28(b), Para 32, the definition of “disclosure topic” and B65(d). Three are replaced by Aus-prefix paragraphs that keep the cross-industry metrics: Aus23.1, Aus37.1 and AusB67.1. The ninth is the effective-date paragraph C1, replaced by AusC1.1. The full text is on the AASB S2 standard-text page.
Para 29(c) is not deleted. The B65(d) deletion does affect it. IFRS S2 B65(d) asks an entity to consider whether an industry metric, such as a real estate flood-zone metric, could meet Para 29(c) in whole or in part. AASB S2 deletes that step. State Para 29(c) as a cross-industry amount and percentage, and connect it to the financial statements, for example by checking that the carrying amounts you use match them (B65(e)). ASIC’s September 2026 review lists that connection as its first action item. For how the figure is measured, see AASB S2 physical risk: two methods behind one number.
The deletion is interim. The AASB intends to finalise Australian industry-based requirements by 2030 (BC30), and its August 2026 work plan lists the work as a research project. The ISSB is still finalising its own amendments to the Industry-based Guidance. For now, IFRS S2 reporters must refer to the guidance. Australian reporters do not have to. Our guide to the IFRS S2 industry metrics covers the eight sectors with a 450a physical-risk topic.
Worked Samples
See an AASB S2 Worked Disclosure
A worked sector disclosure walked paragraph by paragraph: Para 22 scenario analysis, Para 29(c) asset vulnerability, the Aus-prefix carve-outs, and Appendix D in practice.
Modification 4: AASB S2 adds not-for-profit user definitions
IFRS S2 defines primary users as investors, lenders and other creditors. For Australian not-for-profit entities, AASB S2 adds parliaments, taxpayers, donors and the people who receive the entity’s services (AusA1, AusB14.1 and AusB15.1). Commercial reporters see no change. Not-for-profit reporters have a wider set of users to consider when they judge materiality.
Version pins in AASB S2: IPCC, GICS and the Paris Agreement
Australian legislative instruments must name fixed versions of outside documents (BC9(c) and BC16), so AASB S2 pins them:
- IPCC. AusB22.1 fixes the IPCC report used for global warming potential values at the Sixth Assessment Report.
- GICS. AusB63.1 fixed the GICS version for financed emissions. AASB S2025-1 deletes it for annual reporting periods beginning on or after 1 January 2027. Earlier application is permitted.
- Paris Agreement. AASB S2 names the Paris Agreement (December 2015) as “the latest international agreement on climate change”. IFRS S2 leaves it unnamed.
- Effective date. AusC1.1 sets annual reporting periods beginning on or after 1 January 2025.
AASB S2025-1 mirrors the ISSB’s December 2025 greenhouse gas amendments, from the same date: periods beginning on or after 1 January 2027. No physical-risk paragraph changed.
What Australian law adds around AASB S2
IFRS S2 has no legal force of its own. Each adopting jurisdiction decides who reports, how scenarios are tested, what is assured and how liability works. In Australia, those rules sit in Chapter 2M of the Corporations Act 2001 and the guidance around it.
Scenario minimum. Section 296D(2B) requires at least two scenarios: one limited to 1.5°C and one well exceeding 2°C, both taken from section 3(a) of the Climate Change Act 2022. ASIC’s guidance points to 2.5°C or more for the second. IFRS S2 leaves the choice of scenarios to the entity. In September 2026, ASIC asked entities to make best efforts to use scenarios aligned with, or as close as possible to, 1.5°C.
Liability window. Section 1707D blocks private legal action over statements about Scope 3 emissions, scenario analysis and transition plans in reports for financial years commencing 1 January 2025 to 31 December 2027. Any forward-looking climate statement is protected only for years commencing in 2025. ASIC actions and criminal proceedings are not blocked.
Assurance. IFRS S2 sets no assurance requirement. Under ASSA 5010, Year 1 brings limited assurance of governance, the description of climate risks and opportunities, Scope 1 and 2 emissions, and any statement that there are no material climate-related risks or opportunities. Scenario analysis, risk management and Para 29(c) are not assured in Year 1. Years 2 and 3 bring limited assurance of the whole report. Reasonable assurance starts in Year 4: financial years commencing on or after 1 July 2028 for Group 1, 1 July 2029 for Group 2 and 1 July 2030 for Group 3. Treasury consulted in 2026 on changing this. Nothing has changed yet.
Regulator review. ASIC supervises under Regulatory Guide 280. Its September 2026 review of reports for 31 December 2025 year ends found wide differences in how entities calculated the Para 29(b) to (e) metrics, including Para 29(c), and some left them out. For who reports and when, see AASB S2 Group 1, 2, and 3.
Moving IFRS S2 work into an AASB S2 report: a seven-point checklist
- Scenarios. Add a 1.5°C scenario and one well above 2°C if your IFRS S2 set lacks them.
- Reporting entity. An Australian subsidiary of a foreign parent that meets the tests files its own report, unless an Australian parent in the group reports for it or ASIC grants relief. Show which group processes, scenarios and targets apply locally.
- Para 29(c). Recalculate it for the Australian reporting entity, as a cross-industry figure that connects to the financial statements.
- Assurance. Scenario analysis, risk management and Para 29(c) fall under limited assurance from Year 2, so keep the method and evidence ready by then.
- Timing. Publish the climate disclosures with the financial statements.
- Liability. Protection from private legal action over scenario-analysis statements covers only reports for financial years commencing 1 January 2025 to 31 December 2027.
- Records. Keep sustainability records, including Para 29(c) and scenario working papers, for 7 years (section 286A).
Hazard data, horizons and the asset register built for IFRS S2 can serve AASB S2. Continuuiti’s platform runs SSP1-2.6, SSP2-4.5 and SSP5-8.5. SSP2-4.5 and SSP5-8.5 are higher-warming pathways often used for the well-exceeding-2°C scenario. None of the three is a 1.5°C scenario.
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Sources
- AASB S2 Climate-related Disclosures (compiled December 2025) and AASB S2025-1: BC9(c), BC14, BC16, BC20, BC21, BC28, BC30, BC33, BC60 to BC64; paragraphs 22, 25, 29(c), 29(e), Aus23.1, Aus37.1, AusA1 and Appendix A; B1 to B18, B65, AusB22.1, AusB63.1, AusB67.1; AusC1.1, C1A, C1B; Appendix D paragraphs 17, 18, Aus20.1, AusB14.1, AusB15.1, AusB38.1 and 64.
- Corporations Act 2001 sections 286A, 292A, 296D(2B) and 1707D; Climate Change Act 2022 section 3(a).
- ASIC Regulatory Guide 280 (RG 280.44 to 280.46, 280.99 and 280.191); ASIC Report 839 (September 2026); ASSA 5010 (compiled December 2025).
- IFRS S2 Climate-related Disclosures (June 2023, as amended December 2025): paragraphs 12, 23, 32, 37, B65(d) and Appendix A; IFRS S1 paragraph 20 and Appendix E.
- Treasury Policy Position Statement, Mandatory climate-related financial disclosures (January 2024); Treasury, Improving the efficiency of climate-related financial disclosures, consultation paper (August 2026).
- AASB work plan (August 2026); ISSB Industry-based Guidance proposals (July 2025 and March 2026).
Frequently asked questions
What is the difference between IFRS S2 and AASB S2?
The AASB S2 vs IFRS S2 difference is four modifications, listed in BC14: Appendix D for the general requirements, the group reporting election under section 292A, the removal of industry-based requirements, and not-for-profit user definitions. The core physical-risk paragraphs are unchanged. Australian law adds a two-scenario minimum, a liability window and assurance phasing.
Do I need to redo my IFRS S2 work for AASB S2?
Mostly no for the physical-risk paragraphs. Check four things: your scenarios must include one limited to 1.5°C and one well exceeding 2°C; an Australian subsidiary of a foreign parent that meets the tests reports for itself; materiality and presentation citations move to AASB S2 Appendix D; and Para 29(c) must stand as a cross-industry figure.
What did AASB delete from IFRS S2?
Nine items. Eight are tied to the Industry-based Guidance. Five are removed outright: Para 12, Para 28(b), Para 32, the definition of “disclosure topic” and B65(d). Three are replaced by paragraphs that keep the cross-industry metrics: Aus23.1, Aus37.1 and AusB67.1. The ninth, effective-date paragraph C1, is replaced by AusC1.1.
What are the amendments to AASB S2?
AASB S2025-1, issued in December 2025, mirrors the ISSB’s December 2025 greenhouse gas amendments to IFRS S2. It applies to annual reporting periods beginning on or after 1 January 2027, and earlier application is permitted. It also deletes AusB63.1. No physical-risk paragraph changed.
When do industry-based metrics start in Australia?
Not before 1 July 2030. Treasury policy is that entities should only be required to disclose against well-established and understood industry-based metrics from 1 July 2030 onwards, and the AASB intends to finalise the requirements by 2030. None has been set yet.
