With Group 1 entities already reporting under the Australian Sustainability Reporting Standards (ASRS 1 and ASRS 2), mid-size entities in Group 2 — those meeting two of three thresholds: AU$200m+ revenue, AU$500m+ gross assets, or 250+ employees — face mandatory climate-related financial disclosures from financial years beginning on or after 1 July 2026.
That sounds distant, but for a June year-end entity, the reporting period begins in just months. Here is what Group 2 entities should be doing now.
1. Confirm Your Group Classification
The two-of-three threshold test catches more entities than revenue alone suggests. Many mid-size entities with relatively modest revenue will be caught by the gross assets test (AU$500m) or the employee count (250+). Run the test against your most recent annual report figures.
2. Establish Governance Structures
ASRS 1 requires disclosure of how your board oversees climate-related risks and opportunities. If you do not yet have a sustainability committee or documented board terms of reference covering climate, start now. Governance structures take time to establish and must be in place before the reporting period begins.
3. Begin Your GHG Inventory
Scope 1 and Scope 2 emissions require limited assurance from the outset. This means your data collection processes, emission factors (use NGER factors for Australian operations), and calculation methodologies need to be auditable. Build evidence architecture now — not after data collection.
4. Map Your Scope 3 Categories
While the modified liability safe harbour applies to Scope 3 disclosures, you still need to identify material Scope 3 categories and begin estimation. For most Group 2 entities, purchased goods and services (Category 1) and use of sold products (Category 11) will be material. Start supplier engagement early.
5. Plan Scenario Analysis
ASRS 2 requires climate scenario analysis. Identify 2-3 relevant scenarios (e.g., 1.5°C orderly transition, 3°C+ limited action) and map physical and transition risks across short, medium, and long-term time horizons. The safe harbour provision applies here, but the analysis must still be conducted in good faith.
What RSustain Can Help With
RSustain provides remote ASRS readiness advisory for Group 2 entities, including gap analysis, GHG inventory design, scenario analysis, and governance structure development. Book a free 30-minute scoping call to assess your readiness.
RSustain UK provides advisory services only. We do not provide statutory assurance or verification.