Approach to developing AASB S2025-1Approach to developing AASB S2025-1

Approach to developing AASB S2025-1

1. In April 2025, the ISSB published an Exposure Draft Amendments to Greenhouse Gas Emissions Disclosures and the AASB published ED SR2 Amendments to Greenhouse Gas Emissions Disclosures, which proposed targeted amendments to IFRS S2 Climate-related Disclosures and AASB S2 Climate-related Disclosures to address application challenges identified by stakeholders related to greenhouse gas (GHG) emissions disclosure requirements.
2. The AASB ED was open for a 34-day comment period that closed on 2 June 2025. The ISSB ED was open for a 60-day comment period to 27 June 2025. The AASB received 15 comment letters and 8 usable survey responses on ED SR2 across various stakeholder groups and also obtained feedback from targeted outreach. A number of Australian stakeholders also provided their comments directly to the ISSB. Most of the stakeholder feedback generally supported the proposed amendments to:
   1. clarify that entities are not required to measure or disclose Scope 3 Category 15 GHG emissions, except for financed emissions (i.e. those related to loans and investments). They supported entities being permitted to exclude from the measurement and disclosure of Scope 3 Category 15 GHG emissions those emissions associated with derivatives, commercial banking and insurance-associated activities;
   2. require disclosures about the financial activities associated with commercial banking, insurance or derivatives, relating to excluded Scope 3 Category 15 greenhouse gas emissions;
   3. change the requirements for classifying financed emissions of entities that participate in commercial banking activities and financial activities associated with the insurance industry. However, they expressed concerns over the proposed continuing use of the Global Industry Classification Standard as a default classification system;
   4. clarify the relief from using the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) to measure greenhouse gas emissions for the relevant part of the entity, where a different jurisdictional or exchange requirement applies in whole or in part, and for as long as that requirement remains in effect; and
   5. use global warming potential values other than those from the latest Intergovernmental Panel for Climate Change assessment for the relevant part of the entity, where a jurisdictional or exchange requirement applies in whole or in part, and for as long as that requirement remains in effect. Stakeholders generally considered this to be a practical solution that would reduce duplication of effort and align with national frameworks such as Australia’s National Greenhouse and Energy Reporting Scheme.
3. The AASB considered the feedback it received from Australian stakeholders in preparing its submissions to the ISSB ED – one comment letter from the AASB alone and a second joint comment letter with the UK Financial Reporting Council and the Sustainability Standards Board of Japan to convey common feedback.