Whether you can use NGA Factors for AASB S2 reporting turns on the standard’s own rules, because AASB S2 does not mention them. What AASB S2 does set are rules on measurement approach, global warming potentials and disclosure that determine how the NGA Factors can be used.
Key points
- AASB S2 does not name the NGA Factors
- Paragraph 29(a)(iii) requires disclosure of approach, inputs and assumptions
- NGA factors already in CO2-e need not be recalculated to AR6 (paragraph B22)
- NGA Factors can be used for Scope 3 estimates
- Record factor source and edition for each figure
Measurement approach and disclosure
Paragraph 29(a)(iii) of AASB S2 requires an entity to disclose the approach it uses to measure its greenhouse gas emissions, including the measurement approach, inputs and assumptions. Whichever factor source is used, it has to be stated, along with the edition.
The global warming potential rule
AASB S2 requires 100-year global warming potentials from the latest IPCC assessment, which paragraph AusB22.1 specifies as the Sixth Assessment Report (AR6), where an entity uses direct measurement (paragraph B21) or uses emission factors not already converted into CO2-e (paragraph B22). Paragraph B22 states that where emission factors have already converted the gases into CO2-e, the entity is not required to recalculate them. NGA factors already expressed in CO2-e therefore fall under that relief. Where the entity applies global warming potentials itself, for example for refrigerant leakage or per-gas factors, AR6 values are required. B22 also asks the entity to use the emission factors that best represent its activity.
Where NGA Factors fit
- Scope 3: the Clean Energy Regulator states the NGA Factors can be used to estimate Scope 3, which AASB S2 requires after the first-year relief.
- Scope 1 and 2: many entities start from their NGER inventory, which uses the Measurement Determination. Mixing sources is possible but should be disclosed.
- Boundary: AASB S2 splits Scope 1 and 2 between the consolidated accounting group and other investees, while NGER follows operational control.
What to document
For each figure, record the factor source, the edition, the scope and category, and any conversion. Where the same data feeds NGER and AASB S2, a reconciliation between the two boundaries and factor sets makes the sustainability report easier to assure.
Why it matters
Assurance of AASB S2 disclosures tests whether the inputs are appropriate and consistently applied. A clear record of when NGA Factors were used, and when the Measurement Determination was used, answers that question directly.
References & sources
Primary regulatory documents and authoritative references underpinning this answer.