AASB S2 Quantitative Disclosures: Essential Climate-related Financial Metrics

The Australian Sustainability Reporting Standards (ASRS) AASB S2 framework requires detailed quantitative disclosures for climate-related risks and opportunities. This page outlines the key data requirements for ASRS compliance, focusing on climate-related financial metrics.

Greenhouse Gas (GHG) Emissions - Scope 1, 2, 3

Organisations must report absolute gross emissions in metric tonnes of CO2 equivalent, following the GHG Protocol methodology:

• Scope 1: Direct emissions from owned or controlled sources

• Scope 2: Indirect emissions from purchased energy

• Scope 3: All other indirect emissions in the value chain, including financed emissions for financial institutions

Climate-related Metrics

To meet ASRS quantitative disclosure requirements, organisations need to report on:

• Proportion of assets or business activities vulnerable to physical risks

• Proportion of assets or business activities vulnerable to transition risks

• Proportion of assets or business activities aligned with climate-related opportunities

Climate-related Targets

Organisations must set and disclose:

• Specific, measurable goals for emissions reduction or climate adaptation

• Timeframes for achievement (short, medium, and long-term)

• Base year for measurement

Financial Impacts of Climate Risks and Opportunities

ASRS compliance requires organisations to:

• Quantify climate-related risks and opportunities on financial performance and position

• Assess potential material adjustments to asset values

Scenario Analysis

Organisations need to conduct and report on resilience testing against at least two climate scenarios:

• Limiting global temperature increase to 1.5°C above pre-industrial levels

• Temperature increase well exceeding 2°C above pre-industrial levels

Meeting ASRS Quantitative Disclosure Requirements

These quantitative elements are fundamental to ASRS reporting, offering stakeholders comparable, decision-useful information. To meet these requirements effectively, organisations should consider:

• Developing robust data collection processes

• Implementing effective analysis tools

• Ensuring consistent reporting methodologies

• Regularly reviewing and updating climate-related metrics

By focusing on these quantitative disclosures and climate-related financial metrics, organisations can work towards comprehensive ASRS compliance and provide stakeholders with valuable insights into their climate-related risks and opportunities.