ASRS Climate Reporting: What Procurement Teams Need to Know

September 18, 2026

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ASRS Climate Reporting: What Procurement Teams Need to Know

Thursday, 18 September 2026

Key takeaways

The Australian Sustainability Reporting Standards (ASRS) make climate-related financial disclosure mandatory for large Australian entities, with reporting phased across three groups from 2025
AASB S2 (Climate related Disclosures) is the mandatory standard. It requires disclosure across four pillars: governance, strategy, risk management and metrics/targets
Scope 3 emissions, which originate in the supply chain, must be reported from each group’s second reporting year. This makes supply chain data a procurement problem
A modified liability regime protects “protected statements” (Scope 3, scenario analysis, transition plans) from private litigation until 2027, but ASIC can still take action for false or misleading disclosures
Procurement teams that understand what ASRS requires can position themselves as essential contributors to their organisation’s climate reporting, not just observers of a finance led process

The Australian Sustainability Reporting Standards (ASRS) are the framework that makes climate related financial disclosure mandatory for Australian entities. The Fair Supply guide to ASRS in 2026 describes the shift directly: sustainability and climate reporting in Australia is no longer a voluntary ESG exercise. It is now part of the financial reporting framework, subject to governance, controls and regulatory scrutiny. For procurement teams, the relevance is high and immediate. Scope 3 emissions, the category that covers supply chain activity, must be reported from each group’s second reporting year. The data needed to produce that report does not sit in the finance system, it sits in the supply chain. Procurement teams that understand what ASRS requires can contribute to their organisation’s compliance. Those that do not will be asked to provide data they have not been collecting.

What are the ASRS and how do they work?

The ASRS framework consists of two standards issued by the Australian Accounting Standards Board (AASB). AASB S1 (General Requirements for Disclosure of Sustainability related Financial Information) is currently voluntary. AASB S2 (Climate related Disclosures) is mandatory for entities that meet the reporting thresholds. The Anthesis guide to ASRS and AASB S2 explains that the standards are closely aligned with the International Sustainability Standards Board’s (ISSB) IFRS S2, adapted for the Australian regulatory context.

AASB S2 requires disclosure across four pillars: (1) Governance: how the board and management oversee climate related risks and opportunities, (2) Strategy: how climate risks and opportunities affect the business model, strategy and financial planning, (3) Risk management: how the entity identifies, assesses and manages climate related risks and (4) Metrics and targets: the quantitative measures the entity uses to assess its climate performance, including greenhouse gas emissions across Scopes 1, 2 and 3.

Who must report and when?

Reporting is phased across three groups based on organisational size. Group 1 entities (over 500 employees, $1 billion in consolidated gross assets or $500 million in annual revenue) commenced reporting for financial years starting from 1 January 2025, Group 2 entities (250 or more employees, $500 million in assets or $200 million in revenue) commenced from 1 July 2026, Group 3 entities (100 or more employees, $25 million in assets or $50 million in revenue) will commence from 1 July 2027.

The AASB overview of the ASRS framework confirms that the first phase focuses on climate-related financial disclosures. Additional sustainability topics such as biodiversity, nature and social factors may be incorporated over time. Scope 3 emissions are required from each group’s second reporting year, meaning Group 1 entities needed credible Scope 3 data by early 2026. For procurement teams in Group 2 entities, the Scope 3 reporting deadline is the 2027-28 financial year, which means data collection should already be underway.

What does this mean for procurement teams specifically?

Scope 3 Category 1 (purchased goods and services) is typically the largest single contributor to an organisation’s total carbon footprint. The data required to report it comes from the supply chain: what was purchased, from whom, in what quantities and with what associated emissions. This is procurement data. The Terrascope analysis of Australia’s climate disclosure rules notes that Group 1 first reports were lodged in 2026, with entities required to submit sustainability reports to ASIC within three to four months of financial year end.

For procurement teams, there are three tasks that follow. The first is spend data mapping: ensuring that procurement spend data is categorised in a way that allows emissions factors to be applied by industry classification and geography. The second is supplier engagement: building the processes to collect activity based or supplier specific emissions data from the suppliers that contribute the most to the Scope 3 footprint. The third is tender and contract integration: embedding climate disclosure requirements into procurement specifications so that new suppliers are contractually required to provide emissions data as part of the commercial relationship.

A procurement team that waits for the sustainability team to ask for data is reactive, but a procurement team that builds emissions data collection into its standard operating procedures is contributing to the organisation’s compliance architecture from the inside.

What liability protections apply?

The legislation includes a modified liability regime for certain climate related disclosures. The Breathe ESG analysis of ASRS explains that “protected statements” including Scope 3 disclosures, scenario analysis and transition plans are shielded from private litigation for financial years between 2025 and 2027. During this period, only ASIC can take non-criminal enforcement action against false or misleading protected statements.

This protection is transitional but not permanent. It reflects the practical reality that Scope 3 data quality is still maturing across the economy. It does not mean that Scope 3 disclosures can be careless. ASIC retains the power to act against disclosures that are false or misleading, with penalties of up to $15 million or 10 per cent of annual turnover for corporations. Directors may be held personally liable. The protection gives organisations time to build their measurement capability. It does not give them permission to disclose without rigour.

How should procurement teams prepare?

Preparation starts with understanding what the organisation has committed to disclose. Procurement leaders should work with the sustainability and finance teams to understand which Scope 3 categories are material, what data is already available, where the gaps are and what the timeline requires. The practical steps for procurement are: audit existing spend data for emissions factor mapping readiness, identify the top 20 to 30 suppliers by estimated emissions contribution, develop a supplier engagement plan for collecting primary emissions data from those suppliers, review tender templates to include climate disclosure requirements for new contracts and establish a data management process that produces auditable Scope 3 inputs on the reporting timeline.

For entities in Group 2, the window for preparation is closing. Scope 1 and 2 reporting commences from 1 July 2026. Scope 3 follows from the second year. Procurement teams that are not already building their data collection capability will be scrambling when the deadline arrives.

How can procurement professionals build this capability?

AcademyGlobal (AG), the Chartered Institute of Procurement & Supply (CIPS) Centre of Excellence for Australia, New Zealand and Southeast Asia, delivers programs that build the strategic and analytical capability ASRS demands from procurement teams. AG’s Strategic Procurement Leadership program addresses how senior procurement professionals lead their function through challenges including sustainability integration, regulatory compliance and supply chain governance. For professionals pursuing internationally recognised qualifications with embedded sustainability content, AG’s CIPS Study Centre delivers the CIPS Diploma and Advanced Diploma pathways, where ethical and sustainable procurement modules are core to the curriculum.

ASRS does not ask procurement teams to become climate scientists. It asks them to collect, manage and report supply chain emissions data with the same rigour they apply to cost, quality and delivery. The teams that treat this as a capability development opportunity rather than a compliance burden will be the ones that add the most value.

Frequently asked questions

What is ASRS?

The Australian Sustainability Reporting Standards are the framework that makes climate related financial disclosure mandatory for Australian entities. AASB S2 (Climate related Disclosures) is the mandatory standard. It is aligned with the ISSB’s IFRS S2 and adapted for the Australian regulatory context.

When must Scope 3 be reported?

Scope 3 is required from each reporting group’s second year. Group 1 entities needed Scope 3 data by early 2026. Group 2 entities will require it from the 2027-28 financial year. Group 3 follows one year later.

Why is ASRS a procurement issue?

Scope 3 Category 1 (purchased goods and services) is typically the largest contributor to total emissions. The data needed to report it originates in the supply chain, which procurement manages. Spend data mapping, supplier engagement and contract integration are all procurement activities.

Are Scope 3 disclosures protected from litigation?

A modified liability regime shields Scope 3 disclosures, scenario analysis and transition plans from private litigation for financial years between 2025 and 2027. ASIC retains enforcement power against false or misleading disclosures during this period.

Where can procurement professionals prepare for ASRS?

AcademyGlobal’s Strategic Procurement Leadership program addresses sustainability integration as a strategic procurement leadership challenge, including the supply chain data responsibilities that ASRS creates.