The 12-Month Operational Plan for Australian ASRS...

Group 2 reporting under AASB S2 is live. Financial years beginning on or after 1 July 2026 are the first reporting periods, which means the first climate disclosure lands alongside the FY27 annual report roughly 15 months from now. Twelve of those months are yours to prepare in. The reporting meter is already running.

Most Group 2 entities we see published guidance for are still writing memos about scope. That is a policy conversation. The work sitting between now and lodgment is operational: which invoices, which factor library, which suppliers, which governance minutes, which assurance provider, which draft, which sign-off. This piece sequences all of it, month by month, for the CFO and the Head of Sustainability who need a shared plan they can execute against.

Who is in Group 2 (and why 1 July 2026 changes the shape of everything)

AASB S2 is the Australian implementation of IFRS S2, issued by the AASB in September 2024. It applies in three cohorts. Group 1 started 1 January 2025 (or the entity's next financial year after that date). Group 2 starts 1 July 2026. Group 3 starts 1 July 2027.

You fall into Group 2 if any of the following are true for the reporting entity and its consolidated subsidiaries:

Consolidated revenue of AUD 200 million or more, or
Consolidated gross assets of AUD 500 million or more, or
250 or more employees, and you meet at least two of those three thresholds, or
You are a registered NGER reporter under the National Greenhouse and Energy Reporting Act 2007, regardless of size.

The NGER pathway is the one that catches people. If your corporate group triggers the 50 kt CO2-e or 200 TJ threshold, or a single facility triggers 25 kt CO2-e or 100 TJ, you are already registered with the Clean Energy Regulator. That registration pulls you into Group 2 by default. There is no size-based escape. See the Group 2 reporting requirements post for the full scoping map.

The trap in the Group 2 cohort is that its reporting period runs from 1 July 2026 to 30 June 2027 for most entities, but the disclosure obligation for Scope 3 gets phased in and the assurance obligation ramps year on year. Limited assurance over Scope 1 and Scope 2 is required in year one under ASSA 5010. Reasonable assurance and full Scope 3 assurance land in later years. That structure means year one is your one chance to establish clean controls before the auditor's scope expands.

Group 3 follows twelve months behind, which matters mainly because assurance provider capacity is booking out. Group 2 companies compete for slots with Group 1 second-year engagements. If you haven't signed an engagement letter by early 2027, the pricing gets ugly.

Month 1 (T-12): Materiality assessment and scope determination

The first month is the boundary decision. AASB S2 paragraph 16 aligns the reporting entity for sustainability disclosures with the reporting entity for general purpose financial statements. Whichever subsidiaries and joint ventures you consolidate in the financial accounts, you consolidate here. The climate materiality assessment guide walks through the mechanics.

Pick a consolidation method. Operational control is the default for most Group 2 entities and aligns with the GHG Protocol Corporate Standard and NGER. If you have joint ventures with material emissions and shared operational responsibility, financial control or equity share may fit better. Carbonly supports all three in the JV consolidation module and lets you switch method by legal entity, so the choice is not permanent lock-in, but the auditor will want the memo.

Deliverable this month: a two-page boundary memo signed by the CFO. Names the reporting entity. Lists every consolidated subsidiary and JV. States the consolidation approach for each. Notes any deviations from the financial reporting boundary and why. This memo is the spine of every conversation with the auditor for the next fifteen months.

Month 2 (T-11): Factor library selection and factor version policy

Group 2 reporters routinely underestimate this month. The choice of emission factor library, and the version of that library you pin to each reporting period, drives every calculation downstream.

The default library for Australian entities is the DCCEEW National Greenhouse Accounts Factors 2025 workbook. It contains 193 factors covering Scope 1 combustion, Scope 2 electricity (both location-based and market-based, with state-level Residual Mix Factors introduced in 2025-26), Scope 3 upstream fuel activities, and 21 per-litre fuel factors that resolve the diesel/petrol/LPG worked examples cleanly. The Victoria grid factor for FY25 is 0.78 kg CO2-e/kWh location-based. Tasmania is 0.20. That single geographic difference reshapes any multi-state footprint.

A version pinning policy is the piece most factor libraries and spreadsheet-based approaches ignore. NGER uses AR5 GWP values. AASB S2 requires AR6 unless the AASB S2025-1 jurisdictional relief applies, in which case the NGER-covered portion of your inventory may use AR5 for the AASB S2 disclosure without recalculation. That relief is narrow and portion-specific. If your emissions are partly NGER-covered and partly not, you will need two GWP versions in play. Carbonly pins a factor version at the record level and calculates the ledger on AR5, which covers the NGER submission and, under the relief, the NGER-covered portion of the AASB S2 disclosure. The AR6 presentation of the uncovered portion is a reporting-layer step in design rather than a second set of stored numbers, so name it in the memo as a manual reconciliation until it is not.

Deliverable this month: a factor policy memo. Names the library (NGA 2025). States which GWP set applies to which portion of the inventory. Documents how the market-based method will or will not be used. Names the person who owns factor version updates when a new NGA vintage lands.

Month 3 (T-10): Source document inventory and per-facility data mapping

Three months in, walk every site. For each facility, list the source documents that will feed the emission ledger. Electricity bills from the retailer. Gas bills. Diesel and petrol fuel dockets or fuel card exports. Refrigerant service reports. Supplier invoices where the goods have material embodied emissions. Waste collection dockets. Water invoices.

This is grunt work and it is where most first-year Group 2 disclosures crack. The ANAO NGER performance audit found that 72% of the 545 reports it reviewed contained errors, with 17% classed as significant. Almost every error traces back to a source document that was never captured, or was captured in the wrong format, or was reconstructed from memory later. Group 2 will not get more forgiving treatment than NGER did.

This gets worse with scale. A mid-tier Australian construction company running a mid-sized project portfolio accumulates fuel dockets quarter after quarter in every format going: clean supplier PDFs, phone photos of thermal paper, printouts stuffed in a site office drawer. Manual data entry at that scale is not slow, it is impossible without corrupting the ledger.

Deliverable this month: a source-document register per facility. Format, frequency, current owner, current collection method, current storage location. Then decide the target state. Carbonly's AI document engine reads 8 file formats (PDF, Word, PowerPoint, Excel, CSV, RTF, images, scanned) and matches each line item back to the NGA library through a 5-tier material matching pipeline, with a Match Provenance badge on every record showing which tier resolved it. Per-project email ingestion addresses and OneDrive/SharePoint folder-per-project sync mean the source-of-truth workflow is push, not pull. That is the operational shift Group 2 needs to make in month three, not month ten.

Month 4 (T-9): Supplier engagement launch for Scope 3 Category 1

Category 1 (purchased goods and services) is usually the largest single line in a mid-market inventory and the one where data quality varies most. Nine months out is the right time to launch supplier engagement because Australian suppliers go into effective shutdown mid-December to late January.

Sequence the ask by spend. Pull your top 20 suppliers by category 1 spend from the general ledger. Most Group 2 entities will find the top 20 covers 60% to 80% of category 1 spend. Fuel suppliers like Ampol will typically have their own emissions data available. Energy retailers like AGL and Origin publish grid-mix and market-based factors for retail customers. Building materials suppliers like Boral publish EPDs for concrete and cement product ranges under the EPD Australasia programme.

For every supplier without published data, use Carbonly's Supplier Portal to send a standardised request. The Supplier Data Chase Agent follows up on stalled requests. Per-supplier extraction templates lock in the format once a supplier starts sending emissions data so you don't re-engineer the intake each quarter. The Trust Graduation Agent tracks which suppliers have consistently provided verified primary data across multiple periods and flags when a supplier's data quality has stabilised enough to move from spend-based to activity-based in the ledger. Methodology labels on every record track exactly which of the four GHG Protocol Scope 3 methods (supplier-specific, hybrid, average-data, or spend-based) produced the number, so the auditor sees the mix at a glance.

Deliverable this month: a supplier engagement plan with named leads, response deadlines, and a fallback methodology for any supplier who declines to respond.

Month 5 (T-8): Baseline emission ledger construction and comparative preparation

AASB S2 paragraph 21 requires comparative information for the immediately preceding period. For a Group 2 entity with a FY27 reporting period, the comparative is FY26 data. Which means baseline reconstruction, unless your NGER submission for FY26 is clean enough to lift directly.

If you are an NGER reporter, this month is largely about mapping the NGER submission into the AASB S2 structure and identifying gaps. NGER covers Scope 1 and Scope 2 for facilities above the reporting threshold. AASB S2 covers Scope 1, 2, and material Scope 3 across the whole consolidated entity. The gap between "NGER-covered facilities" and "consolidated group" is where the extra work lives.

If you are not an NGER reporter, this is the month to reconstruct FY26 activity data from utility bills and fuel records. Carbonly baseline snapshots create a locked, timestamped view of the comparative period that survives later restatements. The restatement register logs any post-lock changes with a reason and a link to the source correction, which is the evidence auditors look for under ASSA 5010.

Deliverable this month: a locked FY26 baseline emission ledger with methodology labels on every record and a documented reconciliation to the NGER submission if applicable.

Month 6 (T-7): Governance, board briefing, external assurance provider selection

Halfway through the plan and the governance layer needs to be in place. AASB S2 paragraph 6 requires disclosure of the governance processes, controls, and procedures used to monitor, manage, and oversee climate-related risks and opportunities. That is not a narrative flourish. The auditor will ask for minutes.

Practical steps for this month:

Add climate as a standing item on the audit committee agenda. Minute the discussion at every meeting from this point forward.
Decide whether climate sits with the audit committee or a dedicated risk or sustainability committee. For most Group 2 entities the audit committee is the cleanest home. The audit committee chair playbook covers what good looks like.
Name a management owner in writing. Usually the CFO. Sometimes shared with a Head of Sustainability. Whoever it is, the position description names climate reporting as an accountability.
Brief the board on Corporations Act section 180 director duty implications of climate disclosure. ASIC RG 280 sets out ASIC's expectations for how sustainability information should be prepared, and s 180 imposes a duty of care and diligence on directors when signing off on it.

In parallel, shortlist three assurance providers. ASSA 5010 (the Australian standard on sustainability assurance issued by the AUASB) is the relevant framework. Limited assurance over Scope 1 and Scope 2 is the year-one requirement for Group 2. The list of registered providers is shorter than the general audit market, and pricing for Group 2 slots is now visibly moving upward as capacity tightens.

Deliverable this month: a signed governance memo, an updated audit committee charter, and three assurance quotes on file.

Month 7 (T-6): Scenario analysis and transition plan drafting

AASB S2 paragraph 22 requires scenario analysis. Group 2 gets some transitional relief in year one that permits a qualitative approach, but the analysis must actually exist. Two scenarios is the minimum: a high warming pathway (typically aligned with a 3°C or 4°C outcome) and a Paris-aligned pathway (typically 1.5°C to 2°C).

Scenario analysis is the section where sustainability consultants are usually the right investment. Their role is not to write your carbon numbers. Their role is to help the CFO and the board think about how transition risk (carbon pricing, changing demand, supply chain shifts) and physical risk (heat stress on assets, flood exposure, water scarcity) reshape the business over 5, 10 and 20-year horizons in a way that is defensible in front of the auditor.

Carbonly's Emissions Forecasting and Safeguard Trajectory Check tools feed the quantitative side of scenario analysis where the scenarios need to be tied back to actual production, energy consumption, or fuel use projections. The Targets module lets you model absolute, intensity, and net-zero pathway targets against multiple scenarios and see the delta between planned trajectory and a required trajectory.

The transition plan itself is a separate deliverable that AASB S2 paragraphs 14(b) and 14(c) require. Our AASB S2 transition plan template post covers the seven credibility criteria we look for.

Deliverable this month: draft scenario analysis with two named scenarios, quantitative or qualitative impact indications by risk category, and a first-cut transition plan.

Month 8 (T-5): Risk management framework integration and climate risk register

AASB S2 paragraphs 25 and 26 require disclosure of the processes used to identify, assess, prioritise, and monitor climate-related risks and opportunities, and whether and how those processes are integrated into overall risk management.

For most Group 2 entities this means a proper climate risk register that sits inside the existing enterprise risk register, not a parallel document that lives with sustainability. Our AASB S2 climate risk register guide sets out the format that auditors have been signing off in Group 1.

Carbonly's varianceExplanationAgent flags material period-on-period changes in the emissions ledger and generates draft explanations that the risk owner can review and sign off. That is the operational link between the emissions data and the risk narrative that most Group 1 reporters had to build manually.

Month 9 (T-4): Draft disclosure with all metrics sections populated from the ledger

Four months out from lodgment, the metrics sections of the disclosure need to be draftable directly from the ledger. AASB S2 paragraph 29 sets out the mandatory metrics: gross Scope 1, gross Scope 2 (location-based and market-based where used), gross Scope 3 by category, and industry-based metrics where applicable.

Carbonly's aasbS2ReportGenerator produces the metrics section of an AASB S2 disclosure directly from the ledger with methodology labels, GWP set, factor version, and source-document links against every number. The ngerReportGenerator produces the parallel NGER submission from the same underlying records so the two frameworks reconcile out of the box.

The strategy, governance, and risk management sections still need human authorship. Carbonly does not write the narrative for you. Consultants sit in that seat, and this is the month their draft should land.

Month 10 (T-3): Internal review, assurance pre-work, restatement register setup

Three months out, the draft goes to internal review. Finance, sustainability, legal, and internal audit each get a copy with tracked comments. The Auditor Workspace inside Carbonly gives the external assurer a read-only account with access to source documents, calculation logic, and the full audit trail so pre-work can start in parallel with internal review.

The restatement register is set up now, not later. Any change to a locked baseline or a locked reporting period from this point forward is logged with a reason code, a link to the source correction, and an approver. That register is the first thing an ASSA 5010 assurer asks for.

Month 11 (T-2): Assurance walk-through and source-document trace verification

Two months out, the assurer walks through the ledger. They pick a sample of emission records and trace each one back to the source document. Carbonly's typed audit events cover 27+ event kinds with a 7-year retention window, which is the trace layer that answers the assurer's questions without a scramble.

Common issues that surface in the walk-through: a facility missing from the meter list, a refrigerant service report that captured the top-up quantity but not the gas type, a supplier invoice where the material match resolved to a lower confidence tier than the surrounding records. The Evidence Pack export packages the walk-through evidence in ASSA 5010 format.

Month 12 (T-1): Board sign-off, section 180 defensibility review, submission

Final month. The board signs off. The CFO signs the AASB S2 disclosure alongside the financial statements. Directors satisfy themselves that the sign-off meets the Corporations Act section 180 duty of care and diligence. The ASIC AASB S2 enforcement priorities piece walks through what ASIC is watching for in year one.

Then submit. The disclosure is lodged alongside the annual report through the ordinary financial reporting channel. The reporting meter for FY28 has already been running for six months. Everything you built in the last twelve months is now muscle memory for the next cycle.

What breaks if you compress this plan into six months

We get asked this every week. Can we do it in six? The honest answer is that six months is enough time to file something, but not enough time to file something the auditor will sign off cleanly under ASSA 5010.

The three failure modes are consistent. First, the baseline (FY26 comparative) gets reconstructed from partial data under time pressure, which produces a Basis of Preparation that assumes more than it proves. Second, supplier engagement collapses because there is no time to send a request, chase a response, receive data, validate it, and load it. Category 1 reverts to spend-based across the board, which is defensible but shows a low data-quality footprint to the auditor. Third, the assurance provider gets late-cycle access, cannot complete their sample testing in time, and issues a limited assurance opinion with more caveats than clean. The Beach Energy enforceable undertaking of 9 July 2025 on the CER register is the public precedent for what compressed timelines look like when a regulator gets involved.

Six months is possible if you already have an NGER-quality baseline and a mature data platform. Fewer than 20% of Group 2 entities are in that position.

What Carbonly does at each stage

Mapped against the plan and limited to what is built and in production today:

Boundary and consolidation (Month 1): JV consolidation module supporting operational, financial, and equity-share methods.
Factor library (Month 2): Seeded NGA 2025 library with 193 factors and 21 per-litre fuel factors. Factor version pinning at the record level. AR5 as the committed ledger calculation, per regulation 2.02, with both GWP tables held per gas and the AR6 reporting view still in design.
Source document intake (Month 3): AI document engine across 8 file formats. 5-tier material matching with Match Provenance badge. Per-project email ingestion. OneDrive and SharePoint folder-per-project sync.
Supplier engagement (Month 4): Supplier Portal with role-based access. Supplier Data Chase Agent. Per-supplier extraction templates. Trust Graduation Agent. Methodology labels per record.
Baseline and comparatives (Month 5): Baseline snapshots. Restatement register. NGER reconciliation view.
Governance and assurance selection (Month 6): Six-role RBAC plus separate Supplier Portal role. Typed audit events across 27+ event kinds with 7-year retention.
Scenario analysis and transition plan (Month 7): emissionsForecasting, safeguardTrajectoryCheck, Targets module (absolute, intensity, net-zero pathway), MACC.
Risk register integration (Month 8): varianceExplanationAgent for period-on-period explanations.
Draft disclosure (Month 9): aasbS2ReportGenerator, ngerReportGenerator, Custom Report Builder.
Internal review and assurer pre-work (Month 10): Auditor Workspace with read-only external assurer access. Evidence Pack export in ASSA 5010 format.
Walk-through (Month 11): Full audit trail on every emission record. Anomaly detection on the ledger. Incident Management module for evidenced remediation.
Sign-off and submission (Month 12): Period locking with lock, submit, and restate workflow. AI assistant integration through an MCP server with 8 tools that lets ChatGPT or Claude read the live emission ledger during board briefings.

What we do not do: PCAF financial-institution scoring, GRESB submission generation, CBAM export, direct push integration with Climate Active or the ISCA IS rating tool. We hold the data those views need. The view itself sits outside Carbonly.

FAQ

When does ASRS Group 2 go live? Financial years beginning on or after 1 July 2026. For a June-year entity, the first AASB S2 disclosure covers 1 July 2026 to 30 June 2027 and is lodged with the FY27 annual report.

What thresholds define Group 2? An entity meeting at least two of: consolidated revenue AUD 200 million or more, consolidated gross assets AUD 500 million or more, 250 or more employees. Plus every registered NGER reporter, regardless of size.

Does an NGER reporter automatically fall into ASRS? Yes. Registration under the National Greenhouse and Energy Reporting Act 2007 pulls an entity into Group 2 by default. Size thresholds do not provide an exit for NGER-registered entities.

What is the assurance requirement for year 1 vs later years? Limited assurance over Scope 1 and Scope 2 under ASSA 5010 in year one. Assurance scope expands in later years to include Scope 3 and to move from limited to reasonable assurance, on the AUASB phasing timetable. See the reasonable assurance ASSA 5010 readiness guide.

Can we do this in six months instead of twelve? Not cleanly. Six months is enough to lodge something. It is not enough to lodge something with a clean assurance opinion. The three usual failure modes are reconstructed baselines, collapsed supplier engagement, and compressed assurance walk-throughs.

Where to start this week

Book the boundary memo work into the CFO's calendar. Pull the top 20 category 1 suppliers by spend from the general ledger. Get three assurance quotes on file. That is week one.

Carbonly is priced per project with a AUD 100 per month workspace minimum. If you want to see the platform against your own utility bills, fuel dockets, and supplier invoices before committing, reach us at hello@carbonly.ai.

The 12-Month Operational Plan for Australian ASRS Group 2 Reporters (Starting Now)