Australia releases draft IFRS-based climate disclosure standards for consultation

The Australian Accounting Standards Board published Exposure Draft ED SR1 proposing ISSB-based climate-related financial reporting standards, open for feedback until 1 March 2024. The move illustrates how jurisdictions localize the ISSB baseline, relevant to India's own climate-disclosure development.

The Australian Accounting Standards Board (AASB) published Exposure Draft ED SR1, 'Australian Sustainability Reporting Standards – Disclosure of Climate-related Financial Information,' based on the ISSB's sustainability disclosure standards. It responds to the Australian government's plan to enforce mandatory climate-related financial disclosure, commencing as early as 2024 for large businesses, with smaller entities phased in over three years. ED SR1 contains draft ASRS 1 (general requirements, based on IFRS S1), ASRS 2 (climate disclosures, based on IFRS S2) and ASRS 101 (references). Feedback closes 1 March 2024.

Large Australian companies and financial institutions are first affected, facing mandatory climate-related financial disclosure as early as 2024, with smaller entities phased in over the subsequent three years. The AASB, a government agency responsible for setting accounting standards, was entrusted with developing these sustainability reporting standards. ASRS 1 focuses specifically on climate-related financial disclosure built on IFRS S1, while ASRS 2 adapts IFRS S2 Climate-related Disclosures for the Australian context.

Indian companies and standard-setters tracking ISSB localization should study Australia's exposure draft as a model for adapting IFRS S1 and S2 into national frameworks. Stakeholders with Australian operations should review ED SR1 and submit feedback before the 1 March 2024 deadline, and prepare for mandatory climate disclosure beginning as early as 2024 for large businesses. The phased approach for smaller entities over three years offers a template for proportionate implementation.

Key figure — Consultation deadline: Friday, 1 March 2024 (ED SR1 feedback)