The Australian Accounting Standards Board (AASB) has released an exposure draft outlining proposed standards for companies to report climate-related information, as reported by ESG Today on October 23. These standards build on the two sets of sustainability disclosure guidelines recently published by the IFRS Foundation’s International Sustainability Standards Board (ISSB), namely, IFRS S1 and IFRS S2. Earlier this year, the Australian government unveiled a plan to implement mandatory climate-related financial disclosure requirements for companies and financial institutes. Under the plan, large companies will be subject to these requirements as soon as 2024, with smaller entities phased in over the next three years.

The release of the exposure draft makes Australia one of the first countries to align its corporate reporting rules with the ISSB standards. AASB Chair Dr Keith Kendall emphasized that standardized, internationally aligned reporting requirements for large entities will provide greater consistency, transparency, and accountability for Australians and investors. Notably, while the AASB’s exposure draft is based on the ISSB standards, the agency has tailored the international standards to Australia’s local conditions. For instance, the proposed standards specified that climate-related disclosure requirements are limited to climate-related risks and opportunities, excluding non-greenhouse gas emissions like ozone-depleting emissions. Furthermore, the draft also offers flexibility regarding Scope 3 value chain emissions, which often represent a significant portion of a company’s emissions footprint but are the most difficult to track. It allows companies to use immediate prior period data if reasonable and supportable current period reporting data is not available.

Sources:

Australia Releases Proposed IFRS-based Climate-related Reporting Standards

https://www.insurancebusinessmag.com/au/news/environmental/australia-moves-closer-to-issb-climaterelated-financial-reporting-standards-452984.aspx

https://www.ifrs.org/news-and-events/news/2023/06/issb-issues-ifrs-s1-ifrs-s2/