Understanding baseline compliance to confidently prepare for AASB S2 climate disclosures

As Group 1 entities move towards public climate disclosure under Australian Accounting Standards Board Sustainability Reporting Standard 2 (AASB S2), the spotlight now turns to Groups 2 and 3. Chief Sustainability Officers in these companies need to start laying the groundwork for a fit-for-purpose reporting capability.

This article offers practical steps and considerations for getting started.

It’s time for Group 2 and 3 covered entities to begin establishing their climate disclosure programs to meet the AASB S2 regime requirements. From 1 July 2026 (Group 2) and 1 July 2027 (Group 3), organisations will need not only to disclose the financial impacts of climate risks and opportunities on their business, but also the actions that they are taking to integrate climate considerations across traditional risk, finance and business strategies. 

Practical steps towards achieving baseline regulatory compliance 

Immediate priorities are to:

• Clarify what climate integration means for your organisation. Industry dynamics, size and current climate maturity will determine the scope and scale of work. Gaining clarity on this early will help you set realistic parameters for your program and create a credible roadmap to get ready for disclosure.
• Design a fit-for-purpose program. Use AASB S2’s proportionality principles to right-size your approach. Align disclosures to available resources and capabilities, rather than defaulting to a one-size-fits-all model.
• Make the most of transition relief. Temporary flexibilities, such as deferring Scope 3 emissions reporting, can buy you time – but only if they are factored into your roadmap from the start. Map out how and when you will close these gaps.
• Strengthen governance and accountability. AASB S2 introduces a three-year period of modified liability for boards. But that window is no substitute for rigour. Establish a robust legal review and sign-off process early to ensure disclosures are compliant, defensible and assurance-ready.

Where can I find out more?

Baringa is at the forefront of climate modelling, materiality assessment and scenario analysis. We’ve helped write many of the world’s disclosure and transition plan standards and we’ve already supported numerous Group 1 entities across all stages of disclosure preparedness. 

We work alongside sustainability legal experts who bring deep understanding of baseline regulatory requirements, and what needs to be considered when preparing for climate disclosure. No matter the stage you’re at, we know how to tailor your climate disclosure program to fit your organisation’s unique needs, translating climate impact into language your business understands. 

Whether you're just getting started or exploring the latest developments, check out our insights on delivering tailored Australian climate disclosure programs here.