AASB S2 Climate Disclosures are coming – is your business ready?

With the Australian Accounting Standards Board (AASB) introducing AASB S1 and AASB S2 Climate Disclosures, businesses must urgently assess their readiness to comply. These standards, effective from 1 January 2025, align Australia’s corporate climate reporting with global frameworks, reinforcing the need for transparency in sustainability-related financial disclosures. Directors and executives must understand their responsibilities now to mitigate risk and unlock value within their organisations.

AASB S1 & AASB S2: What you need to know

AASB S1

General Requirements for Sustainability-related Financial Disclosures AASB S1 sets the framework for organisations to voluntarily disclose material sustainability-related risks and opportunities that could impact their financial position, performance, or prospects. It establishes the foundation for structured, reliable sustainability reporting.

AASB S2

Climate-related Financial Disclosures AASB S2 focuses specifically on climate-related disclosures, requiring companies to report on governance, strategy, risk management, and metrics and targets related to climate change.

This standard mandates alignment with the Task Force on Climate-related Financial Disclosures (TCFD) framework, ensuring Australian companies meet global investor and regulatory expectations. Over the next 3 years AASB S2 will apply to approximately 6,000 Australian businesses that meet 2 of the 3 criteria:

1. Business turnover >$50 Million,
2. More than 100 employees
3. Gross Assets > $25 Million.

Why immediate action is essential

The introduction of these standards, with a progressive implementation from January 2025, signals a significant shift in corporate accountability. Companies that fail to prepare risk regulatory scrutiny, legal liabilities, and reputational damage. Directors must act now to understand their disclosure obligations and establish robust systems to meet compliance requirements.

Beyond compliance, embracing AASB S1 and AASB S2 presents an opportunity to enhance business resilience. Companies that proactively assess their climate risks, set clear targets, and integrate sustainability into decision-making will strengthen stakeholder trust and long-term financial performance.

How Carbon Pulse and Carbon Map help businesses prepare

For many organisations, the path to compliance can seem overwhelming. C6 ESG provides a structured approach to help businesses navigate the new reporting landscape with two key tools:

Carbon Pulse: Your first step toward understanding compliance

Carbon Pulse is a rapid assessment tool designed for business leaders to understand where they stand under the new regulatory framework. Through a short survey, organisations can identify their Australian Treasury grouping (Group 1, 2, or 3) and receive immediate guidance on:

• What AASB S1 & AASB S2 means.
• Reporting obligations and timing based on company size and sector.
• Recommended next steps to begin preparing for compliance.
• Access to online resources covering ESG, climate disclosures, and sustainability strategies.

Carbon Pulse is ideal for companies at the early stages of their climate disclosure journey, providing a clear starting point without requiring extensive data collection or analysis.

Carbon Map: Building a path to compliance

Carbon Map is a structured framework that helps businesses move beyond awareness to action. It enables companies to:

• Assess their current ESG maturity and identify gaps.
• Develop climate governance structures to meet regulatory expectations.
• Establish requirements and systems for data collection, reporting, and risk management.
• Align with AASB S2 requirements by integrating climate disclosures into their corporate strategy.

By leveraging Carbon Map, businesses can move from basic compliance to strategic advantage, embedding sustainability into their operational and financial decision-making.

Act now to secure your future

The introduction of AASB S1 and AASB S2 is a call to action for Australian businesses. Delaying preparation could expose companies to unnecessary risks, while those who act now can gain a competitive edge.

C6 ESG’s Carbon Pulse and Carbon Map offer a structured, practical approach to help organisations take the first step, assess their risks, and build a compliant and future-ready sustainability strategy.

The time to act is now – company directors and executives must engage with these new requirements, understand their responsibilities, and leverage the right tools to navigate this complex but critical transition.