The Australian Accounting Standards Board recently published draft Australian Sustainability Reporting Standards (ASRS). ASRS 1 will cover climate reporting in the context of governance, strategy and risk management, while ASRS 2 provides standards for climate-related financial disclosures. These are built on the foundation laid by the ISSB in its IFRS standards, though the Australian standards adapt some key language. For example, ASRS 1 replaces all references to “sustainability” with “climate” making it clear that Australia is looking to limit the scope of reporting to climate issues rather than sustainability more broadly.
Responsible Investor covered the drafts in a recent article:
“The Australian standards have been developed in consideration of the Treasury’s second consultation paper on climate-related financial disclosure, which saw the finance sector push for full alignment with the ISSB to ensure global interoperability.”
Australia is one of the growing list of countries using the ISSB as a baseline for climate reporting laws, yet this comes at a time of tension between the EU’s ESRS and the ISSB’s IFRS. Despite calls from the EU for more countries to use the double materiality approach, it appears most jurisdictions are content to rely on financial materiality for their reporting regimes for now. The ASRS further reinforce ISSB’s position as a global standard setter. Depending on comments received and the time needed for further development, the Australian government expects to finalize their reporting standards between 2024 and 2027.
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