How to Prepare for ASRS: Group 2 Reporters

What Group 2 reporters need to know about ASRS compliance timelines, requirements, and preparation steps.

Group 2 entities — those meeting at least two of the thresholds of $200 million revenue, $500 million gross assets, or 250 employees — must begin reporting for financial years starting on or after 1 July 2026. With Group 1 already reporting, you have the advantage of learning from their experience. Here is how to prepare.

Your reporting timeline

For a standard 30 June year-end, your first sustainability report covers FY2026–27, published alongside your annual financial report in late 2027. That means your data collection period has effectively already begun — or will soon.

Unlike Group 3 entities (who start in July 2027), Group 2 has a tighter preparation window. If you have not yet started, the time to act is now.

Transition reliefs for Group 2

The Treasury Laws Amendment Act 2024 provides several transition reliefs:

Scope 3 emissions — relief from reporting Scope 3 for your first reporting year only. From year two onward, Scope 3 disclosure is mandatory. This is one year less relief than Group 3 receives
Scenario analysis — qualitative scenario analysis is permitted in the first year; quantitative analysis can follow later
Comparative information — not required in the first year
Safe harbour (modified liability) — Scope 3 disclosures and forward-looking statements are protected from civil liability during the transition period, provided they are made in good faith. Only ASIC can take non-criminal action for potentially misleading statements during this time

What you need to disclose

Your report must comply with AASB S2 (Climate-related Disclosures) across all four pillars:

Governance

Describe how your board oversees climate-related risks and opportunities, and management's role in assessing and managing them. This requires documented governance processes, not just a statement of intent.

Strategy

Identify climate-related risks and opportunities over short, medium, and long term horizons. Explain their impact on your business model, strategy, and financial planning. Include scenario analysis (qualitative is acceptable initially) and your transition plan.

Risk management

Describe how climate-related risks are identified, assessed, prioritised, and integrated into your overall risk management framework.

Metrics and targets

Report your Scope 1 and Scope 2 emissions from day one. Disclose any climate-related targets and your progress against them. Scope 3 reporting begins in your second year.

Assurance requirements

From your first reporting year, you will need limited assurance on Scope 1 and Scope 2 emissions. The assurance requirement broadens over time:

Year 1 — limited assurance on governance and Scope 1–2 emissions
Year 2 — limited assurance expands to strategy disclosures
Year 3 — governance requires reasonable assurance
Year 4 — all areas shift to reasonable assurance

Engage your assurance provider early. The AUASB has published sustainability assurance guidance that your provider will follow.

Preparation checklist

Immediate priorities (now)

Confirm your group classification — verify you meet at least two of the three thresholds at the consolidated level
Appoint a project lead — someone with authority to coordinate across finance, operations, and the board
Map your emissions sources — identify all Scope 1 sources (company vehicles, gas, refrigerants) and Scope 2 sources (purchased electricity)
Review Group 1 reports — study published Group 1 sustainability reports for structure and disclosure examples

Next 6 months

Implement data collection systems — set up processes to capture energy, fuel, and emissions data on an ongoing basis
Calculate your baseline — produce a preliminary Scope 1 and 2 inventory using NGA Factors
Establish board governance — formalise how your board oversees climate-related risks. Document roles, responsibilities, and reporting cadence
Conduct a climate risk assessment — identify material physical and transition risks relevant to your business and sector

Pre-reporting period

Begin Scope 3 scoping — even though it is deferred to year two, start mapping your value chain and identifying your largest Scope 3 categories now
Prepare scenario analysis — develop qualitative climate scenarios, including a 1.5°C pathway
Select an assurance provider — demand for sustainability assurance is growing rapidly; secure an engagement early
Draft your first report — use the EY illustrative examples and disclosure checklist as a reference

Key differences from Group 3

Group 2 receives one year of Scope 3 relief (Group 3 gets two years)
Group 2 reporting starts one year earlier (July 2026 vs July 2027)
As a larger entity, you are likely to face greater stakeholder scrutiny and should aim for higher-quality disclosures from the outset