AASB S2 Group 1, 2, and 3: When Each Group Must Report

The standard itself, AASB S2, has one effective date. It applies to annual reporting periods beginning on or after 1 January 2025. But the Corporations Act, as amended by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024, applies that standard to three different classes of entity at three different dates. The result is a three-wave rollout of mandatory climate-related financial disclosure across Australian reporters over three years.

For the changes Australia made to the standard itself, see how AASB S2 differs from IFRS S2 on physical risk. The rest of this piece answers four questions: which group is my company in, when is my first AASB S2 disclosure due, what’s transitional in Year 1, and what should I be doing right now.

§1. Which group is my company in?

The Corporations Act, as amended in 2024, sets three categories. The Group 1 and Group 2 size tests are written into the Act. The Group 3 test uses the large proprietary company thresholds, which regulations can change. The dates each category first applies AASB S2 are what we map out below.

Group 1: largest entities, first wave

Group 1 captures large entities that meet at least two of three Group 1 size thresholds set by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024: consolidated revenue of AU$500 million or more, consolidated gross assets of AU$1 billion or more, or 500 or more employees. It also captures NGER registered corporations whose group emits 50 kt CO₂-e or more, even if they do not meet the size criteria. Super funds, registered schemes and retail CCIVs are excluded from Group 1. NGER is the National Greenhouse and Energy Reporting scheme, Australia’s emissions-measurement framework for large industrial emitters. The NGER inclusion is an Australian-specific mechanism that pulls high-emitting entities into the first wave on emissions grounds alone.

The first financial year in which a Group 1 entity must apply AASB S2 is the first financial year that begins on or after 1 January 2025.

Group 2: mid-size entities, second wave

Group 2 captures entities that meet at least two of three Group 2 size thresholds, set in the same amending Act and smaller than Group 1: consolidated revenue of AU$200 million or more, consolidated gross assets of AU$500 million or more, or 250 or more employees. Group 2 also captures all other NGER registered corporations, and super funds, registered schemes and retail CCIVs with assets of AU$5 billion or more. The first financial year in which a Group 2 entity must apply AASB S2 is the first financial year that begins on or after 1 July 2026.

Group 3: entities meeting the Group 3 size test, third wave

Group 3 captures smaller large entities that meet at least two of three Group 3 size thresholds: consolidated revenue of AU$50 million or more, consolidated gross assets of AU$25 million or more, or 100 or more employees. Not-for-profit companies that must prepare a Chapter 2M financial report face the same tests in every group. Registered charities that report to the ACNC instead are outside the regime. The first financial year in which a Group 3 entity must apply AASB S2 is the first financial year that begins on or after 1 July 2027.

Out of scope (for now)

Entities are out of scope if they do not prepare a Chapter 2M financial report. They are also out of scope if they meet no reporting test: the Group 3 size test, NGER registration, or AU$5 billion in assets for super funds, registered schemes and retail CCIVs. The Government proposed in the 2026-27 Budget to raise the Group 3 revenue and asset tests to AU$100 million and AU$50 million. That change is not yet law. A Treasury review of coverage and liability settings is planned for 2028-29 (covered in §5).

§2. When is my first AASB S2 disclosure due?

The primary source for the three application dates is paragraph BC88 of the AASB Basis for Conclusions:

“The financial period in which an entity is first required to apply AASB S2 is specified in the Corporations Act as amended by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024. It specifies three application dates (financial years beginning on or after 1 January 2025, 1 July 2026 and 1 July 2027) for the various classes of entity, based on entity size or, for NGER reporters, on level of emissions.”
Source: AASB S2 Basis for Conclusions, paragraph BC88.

The standard’s own effective date appears at paragraph AusC1.1 of the standard:

“An entity shall apply this Standard for annual reporting periods beginning on or after 1 January 2025. Earlier application is permitted. If an entity applies this Standard earlier, it shall disclose that fact.”
Source: AASB S2, paragraph AusC1.1.

The phrase “financial years beginning on or after [date]” trips most readers on first encounter. It does not mean the first AASB S2 disclosure is filed on that date. It means the first financial year that begins on or after that date is the first year the entity applies the standard. The first disclosure is filed after that financial year ends.

Most Australian companies use a 31 December year-end or a 30 June year-end. A handful use 31 March or 30 September. The table below maps year-end conventions to first disclosure dates for Group 1.

Group 1: first AASB S2 disclosure by year-end

Worked examples by cohort: the 31 December year-end Group 1 cohort (the calendar-year cohort) has already filed the first mandatory AASB S2 disclosure. The 30 June year-end Group 1 cohort reports for the year ended 30 June 2026. Listed entities lodge by 30 September 2026 and others by 31 October 2026. Some early-application reporters chose to publish preparatory FY25 disclosures before they were strictly required to; AusC1.1 explicitly permits this.

Group 2 (first financial year beginning on or after 1 July 2026): 30 June year-ends file for year ended 30 June 2027 (August to October 2027 filing window); 31 December year-ends file for year ended 31 December 2027 (February to April 2028).

Group 3 (first financial year beginning on or after 1 July 2027): 30 June year-ends file for year ended 30 June 2028 (August to October 2028); 31 December year-ends file for year ended 31 December 2028 (February to April 2029).

Once you know your year-end and your Group, the date your first AASB S2 disclosure is due is a mechanical lookup.

§3. What’s transitional in Year 1: Appendix C reliefs

AASB S2 has three transitional reliefs that apply in the first reporting year for any entity, regardless of which Group the entity falls into. These reliefs are issued by the AASB itself and live in Appendix C of the standard. They are separate from the modified-liability protection in the Corporations Act amendments, which is covered in §4.

Para C3: no comparative information required in Year 1

“An entity is not required to provide the disclosures specified in this Standard for any period before the date of initial application. Accordingly, an entity is not required to disclose comparative information in the first annual reporting period in which it applies this Standard.”
Source: AASB S2, paragraph C3.

In plain English: in the first year an entity applies AASB S2, it does not need to restate prior-period figures as comparative information. This applies to every disclosure in the standard, including the physical-risk asset disclosure under paragraph 29(c) (the requirement to disclose the amount and percentage of assets vulnerable to climate-related physical risks), scenario analysis under paragraph 22, and anticipated financial effects under paragraphs 15 to 21.

Para C4(a): carry-forward of a non-GHG-Protocol measurement method

“if, in the annual reporting period immediately preceding the date of initial application of this Standard, the entity used a method for measuring its greenhouse gas emissions other than the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004), the entity is permitted to continue using that other method”
Source: AASB S2, paragraph C4(a).

In plain English: an entity that used another method, such as an NGER method, in the year before it first applies AASB S2 can keep using it in its first year.

Para C4(b): Scope 3 (and financed emissions) deferral

“an entity is not required to disclose its Scope 3 greenhouse gas emissions (see paragraph 29(a)) which includes, if the entity participates in asset management, commercial banking or insurance activities, the additional information about its financed emissions (see paragraph 29(a)(vi)(2) and paragraphs B58–AusB63.1).”
Source: AASB S2, paragraph C4(b).

In plain English: full Scope 3 disclosure is optional in Year 1 for every reporter. For asset managers, commercial banks and insurers, the relief also covers the financed-emissions disclosure. Year 2 requires both.

Para C5: carry-forward as comparative information

“If an entity uses the relief in paragraph C4(a) or paragraph C4(b), the entity is permitted to continue to use that relief for the purposes of presenting that information as comparative information in subsequent reporting periods.”
Source: AASB S2, paragraph C5.

In plain English: a reporter that deferred Scope 3 disclosure in Year 1 does not have to present Year 1 Scope 3 figures as comparatives in Year 2. The Year 1 deferral does not compound into a Year 2 disadvantage requiring back-calculation.

These three reliefs are universal. They apply to every Group, every entity, the first year that entity applies AASB S2.

§4. Modified-liability protection: a calendar-dated window in the Corporations Act

The Corporations Act amendments include a separate transitional protection for certain climate statements. This is commonly called modified-liability protection. It is different from the Appendix C reliefs in §3.

Section 1707D of the Corporations Act sets out the protection.

What it does. Private parties cannot sue over statements about Scope 3 emissions, scenario analysis or transition plans in sustainability reports for financial years commencing 1 January 2025 to 31 December 2027. Any climate statement about the future is also protected, but only in reports for financial years commencing in 2025.

What it does not do. It does not stop ASIC actions or criminal proceedings. It does not cover statements outside the sustainability report and the auditor’s report on it, unless another Commonwealth law requires the same statement.

Practical implication: the window is fixed by calendar dates. Group 1 entities get three years, Group 2 one or two, and Group 3 one or none, depending on year end. Paragraph 29(c) figures sit outside the three named categories. Since 5 December 2025, an entity not yet required to report can opt in for a year commencing before 1 January 2028, with a signed directors’ declaration.

The 2028 to 2029 Treasury review will revisit the liability framework alongside the Group 3 coverage settings. This is covered in §5.

§5. What changes in Year 2 and beyond

The Year 1 transitional period ends after the first reporting year. Several things change in Year 2.

• The comparative information requirement begins. The prior year’s disclosures become the comparative columns in Year 2.
• Scope 3 disclosure becomes mandatory for any reporter that deferred under paragraph C4(b).
• Financed-emissions disclosure becomes mandatory for asset managers, commercial banks, and insurers.
• Under paragraph C5, Scope 3 figures deferred in Year 1 do not have to be presented as comparatives in Year 2.

Protection for Scope 3, scenario analysis and transition plan statements ends with reports for financial years commencing on or after 1 January 2028. The reasonable-steps directors’ declaration ends at the same point.

Nearer changes are also in train. The Government has proposed higher Group 3 revenue and asset thresholds, and Treasury consulted on assurance and other settings from August to October 2026. None of this is law yet, and Treasury says it will not affect 2026-27 reporting.

The 2028 to 2029 Treasury review is the headline forward-look. Paragraph BC87 of the AASB Basis for Conclusions sets out the review’s remit:

“Furthermore, the AASB notes that the Australian Government will conduct a review of climate disclosure requirements in 2028–29. The Treasury Policy Position Statement Mandatory climate-related financial disclosures (January 2024) states that the Australian Government will conduct a review of climate disclosure requirements in 2028–29. The review will be led by Treasury, working with the Council of Financial Regulators. At a minimum, the review will examine the effectiveness of coverage settings (particularly the approach to Group 3 entities), appropriateness of the liability framework and whether there are any other barriers that may be affecting a company’s ability to make quality disclosures, including data availability, and supporting materials.”
Source: AASB S2 Basis for Conclusions, paragraph BC87.

AASB S2 in its first cycle is not the steady-state version of AASB S2. The next three years reveal what the steady-state version looks like.

§6. What to do right now, by group

Group 1

1. If you have filed already (31 December year-end cohort): start the Year 2 Scope 3 inventory build and the financed-emissions calculation if it applies to your sector.
2. If you are filing this year (30 June year-end and other non-calendar year-ends): complete the paragraph 29(c) physical-risk asset register and finalise the paragraph 22 scenario-analysis outputs. Platforms like Continuuiti provide the physical-risk data layer for the AASB S2 paragraphs that need quantitative inputs: 12-hazard assessment under SSP scenarios as a physical-risk input to the paragraph 22 scenario analysis (the higher-warming scenario), with asset-level damage estimates for the paragraph 29(c) percentage-vulnerable disclosure.
3. Document modified-liability-shielded statements with internal sign-off chains.
4. Agree the ASSA 5000 limited-assurance scope with the assurance provider. ASSA 5000 is the AUASB sustainability assurance standard in force for first-wave reporters. For the year-by-year schedule of what gets reviewed and when the full audit starts, see the AASB S2 assurance timeline.
5. Document your sector context for future industry-based metrics application. AASB-developed Australian industry-based metrics are expected from 2030; in the interim, no equivalent disclosure is required under AASB S2.

Group 2 (first financial year beginning on or after 1 July 2026)

1. Form the climate-risk governance committee at board level if not yet done.
2. Articulate the materiality framework before drafting begins. KPMG specifically flagged “develop a materiality framework that drives considerations of material information to users for disclosure” as a key practical consideration for first-time reporters in their FAST 30 cohort review of 30 first-wave Group 1 reporters (March 2026).
3. Build the asset-level data inventory.
4. Run scenario-analysis rehearsal exercises.
5. Scope sector context by GICS classification for future industry-based metrics application. AU equivalents are pending the AASB workplan, expected from 2030.

Group 3 (first financial year beginning on or after 1 July 2027)

1. Add climate-related financial risk to the board agenda.
2. Decide the materiality framework (single-issue or broader sustainability).
3. Start the asset register at high level.
4. Track the proposed rise in Group 3 revenue and asset thresholds, which is not yet law, and the 2028-29 Treasury review.
5. Watch the AASB project on scalability for not-for-profit and smaller entities (BC83-BC84).

§7. Sources

• AASB S2 (September 2024), paragraphs AusC1.1, C3, C4, C5.
• AASB S2 Basis for Conclusions (September 2024), paragraphs BC83, BC84, BC85, BC87, BC88, BC89.
• Corporations Act 2001 (as amended by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024), sections 292A, 296B, 319(3), 1707B, 1707C, 1707D and 1707DA.
• Treasury, Improving the efficiency of climate-related financial disclosures, consultation paper (August 2026).
• NGER Scheme legislation: National Greenhouse and Energy Reporting Act 2007 and associated Regulations.
• Treasury Policy Position Statement: Mandatory Climate-Related Financial Disclosures (January 2024).
• KPMG FAST 30: AASB S2 First Impressions cohort review (March 2026).
• Related: how AASB S2 differs from the underlying international standard → https://continuuiti.com/blog/aasb-s2-vs-ifrs-s2-physical-risk/
• Related: how AASB S2 relates to AASB S1 → https://continuuiti.com/blog/aasb-s1-vs-s2/

Frequently asked questions

Which group is my company in?

Australia’s Corporations Act, as amended by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024, sets three categories. Group 1 captures the largest entities plus NGER groups emitting 50 kt CO2-e or more. Group 2 captures mid-size entities, all other NGER registered corporations, and asset owners with AU$5 billion or more in assets. Group 3 captures other entities meeting the Group 3 size test.

When is my first AASB S2 disclosure due?

Group 1 applies the standard from the first financial year beginning on or after 1 January 2025. Group 2 applies from the first financial year beginning on or after 1 July 2026. Group 3 applies from the first financial year beginning on or after 1 July 2027. The first mandatory disclosure is filed after that financial year ends, within three months of year end for listed and other disclosing entities, registered schemes and super funds, and within four months for others.

Can I use the transitional reliefs in Year 1?

Yes. Three universal reliefs in Appendix C apply to every Group, every entity, in the first year it applies AASB S2. Paragraph C3 removes the comparative information requirement. Paragraph C4(a) lets entities continue using a non-GHG-Protocol measurement method, which matters for NGER reporters. Paragraph C4(b) makes Scope 3 disclosure optional in the first year, including financed emissions for asset managers, banks and insurers. It is required from the second year.

What is modified-liability protection and how long does it last?

Modified liability is a transitional protection in section 1707D of the Corporations Act. Private parties cannot sue over statements about Scope 3 emissions, scenario analysis or transition plans in reports for financial years commencing 1 January 2025 to 31 December 2027. Any climate statement about the future is protected only in reports for years commencing in 2025. ASIC actions and criminal proceedings are not blocked.

Do I need to restate prior-year figures in my first AASB S2 disclosure?

No. Paragraph C3 of AASB S2 removes the comparative information requirement in the first annual reporting period in which an entity applies the standard. This applies to every disclosure in AASB S2, including the paragraph 29(c) physical-risk asset disclosure, paragraph 22 scenario analysis, and anticipated financial effects under paragraphs 15 to 21. Comparative information is required from Year 2 onwards.

Is AASB S2 mandatory for all Australian companies?

No. AASB S2 is mandatory only for entities that prepare a Chapter 2M financial report and meet a group’s test. The tests are a two-of-three size test, NGER registration, or AU$5 billion in assets for super funds, registered schemes and retail CCIVs. The Government has proposed raising the Group 3 revenue and asset thresholds. That change is not yet law.