When are AASB S2 Scope 3 emissions required?

AASB S2 requires Scope 3 greenhouse gas emissions, and the categories included, from an entity's second annual reporting period under the standard. The first annual period is exempt under paragraph C4. Statements about Scope 3 also carry modified liability for financial years beginning between 1 January 2025 and 31 December 2027.

AASB S2 Scope 3 Emissions: When They Are Required

AASB S2 Scope 3 emissions are a required disclosure under paragraph 29(a)(vi). An entity must disclose its Scope 3 greenhouse gas emissions, the categories included in the measurement, and for asset management, commercial banking or insurance activities, additional information about financed emissions.

Key points

Required by paragraph 29(a)(vi), including the categories measured
Not required in the first annual reporting period (paragraph C4(b))
All 15 categories must be considered (B32)
Measurement framework prioritises measured, activity-specific, timely and verified data (B40 to B54)
Protected statements under modified liability for financial years beginning 1 January 2025 to 31 December 2027

When Scope 3 is first required

In the first annual reporting period in which an entity applies AASB S2, it need not disclose Scope 3 emissions, including financed emissions (paragraph C4(b)). Scope 3 is required from the second annual reporting period onwards, and the entity may continue to use the relief for the comparative figures in later reports (paragraph C5).

How Scope 3 must be measured

An entity considers its entire upstream and downstream value chain and all 15 Scope 3 categories in the GHG Protocol Corporate Value Chain (Scope 3) Standard, and discloses which categories it includes (paragraph B32). The measurement framework in paragraphs B40 to B54 requires the entity to prioritise inputs and assumptions that are:

based on direct measurement
from specific activities in the entity’s value chain
timely, and representative of the jurisdiction and technology of the value chain activity
verified

Estimation is expected, and the entity explains the measurement approach, inputs and assumptions it has used. The framework applies even where a jurisdictional authority requires a different measurement method.

Using value chain data from other periods

Suppliers and customers often report on different dates. Paragraph B19 permits information from reporting periods that differ from the entity’s own if the entity uses the most recent data available without undue cost or effort, the periods are the same length, and the entity discloses the effects of significant events between the reporting dates.

Financed emissions and Category 15

AASB S2025-1, for annual periods beginning on or after 1 January 2027 or earlier if elected, permits an entity to limit Category 15 measurement to financed emissions, excluding derivatives and some financial activities, with an explanation of what is excluded.

Legal protection in the early years

Under the Corporations Act, statements about Scope 3 emissions in the sustainability report are protected statements for financial years beginning between 1 January 2025 and 31 December 2027. Only ASIC, or a criminal proceeding, can act on them in that window.

Why it matters for asset-intensive operations

Scope 3 is usually the largest and least controlled part of the inventory. Purchased goods, transport, and the processing and use of sold products depend on data held by others, so a data request programme for suppliers and customers needs to run well before the second reporting year.

References & sources

Primary regulatory documents and authoritative references underpinning this answer.