Policy Update: Upcoming ASRS and CRFD Requirements for Large Energy Users in Australia
From 1 January 2025, large entities in Australia—including major energy users—are subject to mandatory climate-related financial disclosure obligations under the Australian Sustainability Reporting Standards (ASRS) and the Climate-Related Financial Disclosure (CRFD) framework. These changes are part of the federal government's broader push to align corporate reporting with global standards and accelerate the transition to a low-carbon economy.
Scope and Applicability
The initial rollout targets Group 1 entities that meet at least two of the following thresholds:
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Consolidated revenue of $500 million or more
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Consolidated gross assets of $1 billion or more
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500 or more employees
This first phase applies for financial years beginning on or after 1 January 2025. Smaller entities will be brought into scope in subsequent phases beginning in 2026 and 2027.
Reporting Standards
The Australian Accounting Standards Board (AASB) has issued:
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AASB S1 – General Requirements for Disclosure of Sustainability-related Financial Information
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AASB S2 – Climate-related Disclosures
These standards are based on the international ISSB (International Sustainability Standards Board) framework and ensure alignment with global practices. While AASB S1 is voluntary for now, AASB S2 is mandatory and focuses specifically on climate-related disclosures.
Disclosure Obligations
Entities must report on the following key areas:
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Governance processes and structures for overseeing climate-related risks and opportunities
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Identification and management of climate-related risks, including impacts on business strategy and financial planning
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Metrics and targets used to monitor and manage climate risks, including Scope 1, 2, and in some cases, Scope 3 greenhouse gas emissions
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Use of scenario analysis to assess the resilience of the organisation’s strategy under various climate scenarios, including a global warming scenario of 1.5°C
These disclosures must be included within an entity’s annual financial report and be subjected to governance at the Board level.
Assurance Requirements
The Australian Auditing and Assurance Standards Board (AUASB) has introduced new assurance guidelines through the approval of ASRS 5000, the first Australian sustainability assurance standard. While limited assurance will be accepted initially, a phased transition to reasonable assurance is expected by 1 July 2030.
Organisations must prepare for increasing scrutiny of reported data and develop internal systems and audit-ready processes to support ongoing compliance.
Implications for Large Energy Users
For major energy consumers, these regulatory shifts have significant implications. Organisations will need to:
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Establish reliable systems for emissions tracking and climate-related data collection
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Integrate climate risk into enterprise risk management and financial planning processes
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Engage with auditors and advisors to ensure readiness for assurance requirements
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Disclose forward-looking strategies for managing climate transition risks and leveraging low-carbon opportunities
Failing to comply may result in reputational, legal, and financial risks, especially as investor and stakeholder expectations intensify.