AASB Update on Sustainability Reporting in Australia
Australian Accounting Standards Board (‘AASB’) announces changes to proposed sustainability reporting standards to align more closely with international standards.
For Australian companies with cross-jurisdictional operations, the AASB changes to the sustainability reporting standards marks a positive step towards enhancing global interoperability, promotes consistency and comparability in sustainability reporting, and reduces the regulatory burden placed on organisations with global footprints.
The initial exposure draft for the Australian Sustainability Reporting Standards (‘ASRS’), released in October 2023, was developed using the International Sustainability Standards Board’s (‘ISSB’) two sustainability disclosure standards: IFRS S1 for general sustainability reporting, and IFRS S2 for climate-specific disclosures. It included:
- ASRS 1 for general requirements for disclosure of climate-related financial information (developed using IFRS S1 as the baseline); and
- ASRS 2 for climate-related financial disclosures (developed using IFRS S2).
Initially, the AASB proposed limiting the scope of disclosure for ASRS 1 to climate-related financial disclosures only, replacing all references to “sustainability” in IFRS 1 with “climate”. However, following feedback from the exposure draft’s consultation period, several amendments have been made to facilitate closer alignment with the international standards.
The first tranche of Australian companies will report their mandatory climate-related disclosures from 1 January 2025. Anabranch recommends organisations should start preparing for both sets of standards now, ensuring that broader ESG topics are also factored into your reporting framework (rather than focusing solely on climate-related disclosures in isolation). This way you can stay ahead of the curve amidst a rapidly evolving regulatory landscape and ensure your disclosures are consistent, relevant, and decision-useful.
For more information on how these changes could affect your company and how to get ahead of your disclosures, get in touch with us today at info@anabranchesg.com.au