Treasury's ASRS Consultation: Scope 3 and Assurance

Two sentences in Treasury's new consultation paper settle whether the ASRS review changes anything for you this financial year.

The first is on page 3: "the changes being considered in this paper will not impact those reporting for the 2026-27 financial year." The second is on page 20: "the Government is not seeking views on changes to Scope 3 emissions reporting requirements or the entities required to report under the regime."

So this isn't a rollback. If you were hoping the Treasury review would let you stand down the data work, read those two lines again and then go back to collecting bills.

The consultation, Improving the efficiency of climate-related financial disclosures, opened on 24 August 2026 and closes Friday 2 October 2026. Treasury is running it with ASIC, the AASB and the AUASB, with input from DCCEEW. If your financial year runs 1 July to 30 June and you're a Group 2 entity, you're already ten weeks into your first mandatory reporting period. The window to influence what happens next closes about three weeks from now.

Three proposals and two side questions are open. Here's what each one would actually do to your data work.

The assurance escalation is genuinely in play

Current law is settled: assurance under ASSA 5010 transitions from limited to reasonable from 1 July 2030, across all disclosures. Treasury now says the first year of Group 1 filings "provides an evidence base" to test whether that's the right setting.

Three options are on the table.

Option	What it does	What it means for your data
1a	Limited assurance stays permanent; the escalation is removed	Independent review continues, but no positive opinion is ever mandated
1b	Reasonable assurance deferred from 2030 to 2035	Five more years of runway, same destination
1c	Two-tier: reasonable assurance for mature metrics, limited for the rest	Treasury's worked example is reasonable assurance over Scope 1 and 2, limited over Scope 3

Option 1c is the one most reporting teams have backwards, and it's the one worth planning around.

The assumption baked into most FY27 budgets is that Scope 3 is where the audit pain lands. Under 1c it's the opposite. Scope 3 keeps the softer standard precisely because Treasury accepts the data is estimated and third-party sourced. Your Scope 1 and 2, the numbers everyone treats as the easy part, get the positive opinion.

That reads differently once you picture a Tier 2 civil contractor with 40 active sites. Under limited assurance, the provider samples fuel dockets and asks whether anything looks obviously wrong. Under reasonable assurance over Scope 1, they test the control that produced every litre of diesel in the ledger: which docket, which site, which cost centre, who approved it, and what happened the day the same docket got scanned twice. That's a much heavier engagement to prepare for, and the same shift would apply to a hospital group's gas accounts, a REIT's landlord-controlled plant, and a logistics operator's fuel card feeds.

We don't know which option wins. Treasury is explicit that legislative amendments here "would be unlikely to be finalised in the short-term," which is public-service phrasing for "don't plan your 2027 budget around this." The 1 July 2030 date in current law is still the only date you can actually rely on, and we've written separately about what an ASSA 5010 engagement asks for today.

Proposal 3 is the end of the blanket supplier survey

The value-chain proposal is the one with real teeth for anyone with a long supplier tail.

Treasury notes that Scope 3 disclosures haven't started yet in Australia (they kick in from a reporting entity's second year), but that "reporting practices observed overseas under similar disclosure requirements has highlighted the potential value of clearer boundaries on value-chain information requests."

Two options are floated. Option 3a is targeted guidance and sector case studies on what constitutes a reasonable request for information from a value chain, including how the AASB S2 proportionality test, "reasonable and supportable information available without undue cost or effort," applies to data requests landing on resource-constrained SMEs. Option 3b would have government develop or collect reputable domestic emission factors so that reporters can lean on better secondary data instead of chasing primary data from suppliers who can't produce it.

Treasury names the sectors it has in mind: road freight, specialised manufacturing, agriculture, and commercial construction. Fragmented industries where the subcontractor at the end of the chain has no technical capacity to calculate their own Scope 1 and 2 output for a corporate client.

Notably, Treasury considered a standardised supplier questionnaire or template and set it aside. The reasoning is worth quoting because it cuts against what a lot of procurement teams are currently building: standardising the request "risks encouraging reporting entities to issue data requests when they are not necessary, as AASB S2 permits the use of secondary estimates (for example see AASB S2 para B49 and RG 280.104)."

That's the direction of travel. If you're a head contractor about to email 300 subcontractors a 40-field emissions questionnaire, the position on the record is already that you probably shouldn't have to, and that a published factor is often the correct answer.

Your workload moves rather than shrinks. Instead of chasing supplier responses you'll be documenting why a secondary factor was appropriate for that spend category, what the factor was, where it came from, and who signed off on the judgement, because that record is what the assurance provider will test. The NGA Factors workbook DCCEEW publishes each year is the obvious starting point for what a government-curated factor set would look like, and option 3b proposes extending that idea into value-chain territory.

For anyone mid-way through building a Scope 3 supplier data programme, the practical takeaway is to stop optimising the survey and start optimising the record of why you did or didn't send it.

The guidance proposal barely counts as a reform, and still matters

The middle proposal asks whether ASIC and the standard setters should publish more guidance on two phrases doing a lot of work inside AASB S2: "reasonable and supportable information ... without undue cost or effort," and the circumstances in which an entity can properly conclude it has no material climate-related risks or opportunities.

Treasury considered amending the standards or the legislation instead, and rejected that. The stated reasoning is that principles-based requirements were designed to flex across different industries, and hard-coding them would cut flexibility and reduce alignment with IFRS S2.

So the likely output is fact sheets, e-learning modules and workshops rather than a rule change. It still matters for one reason. If you're planning to lean on "undue cost or effort" to limit a Scope 3 category this year, you're doing it before the guidance exists, and your assurance provider will ask you to show the reasoning regardless.

The NGER period mismatch finally made the agenda

Past the three headline proposals, under "Opportunity 1," sits the item most likely to save real money for the reporters we build for.

Treasury asks (questions 20 to 23) about entities subject to both sustainability reporting and NGER, and what happens when the two reporting periods don't line up. NGER runs 1 July to 30 June, with submission to the Clean Energy Regulator by 31 October. AASB S2 attaches to your financial year. If your balance date isn't 30 June, you are maintaining two emissions datasets on two calendars for the same physical facilities.

That covers December balancers, Australian subsidiaries of foreign parents aligned to a group calendar, and plenty of listed entities with non-standard year ends.

Layer the GWP question on top. NGER applies AR5 global warming potentials. AASB S2 points at the latest IPCC assessment available at the reporting date, currently AR6. The AASB's December 2025 amendment, AASB S2025-1, clarified that jurisdictional relief lets an entity keep using the GWP values a jurisdictional authority requires, and that the relief can apply to part of an entity rather than forcing one approach across the whole boundary. Helpful, and also one more thing to track. A December-balancing NGER reporter can end up running two boundaries, two calendars and two GWP sets against the same meter. We've broken down how the AR5 and AR6 split actually changes your numbers elsewhere.

If that's your situation, questions 20 to 23 were written for you. Answering them with real hours and real dollars is more useful to Treasury than another submission arguing the framework is burdensome in general.

What to do in the next three weeks

File a submission. Submissions close 2 October 2026 and are published unless you mark them confidential, so a well-argued one also puts your position on the public record. Questions 13 and 14 cover value-chain data requests from both the receiving and requesting side. Questions 20 to 23 cover the NGER period mismatch. If a consulting practice is running your ASRS engagement, they can lodge on your behalf, and most are already drafting.

Don't re-plan FY2026-27. Group 2 entities with a 1 July start date are mid-period. Group 3 begins 1 July 2027. The Budget's separate change to large proprietary company thresholds ($100 million revenue, $50 million assets) will relieve smaller Group 3 entities, but timing is still to be confirmed through the broader regulatory reform package, and it doesn't touch Group 2 obligations at all.

Then build the evidence file. Every one of these proposals converges on the same requirement: a defensible record of judgement. Why this boundary, why this factor, why this estimate rather than a supplier request, who approved it, and when. That's what Carbonly's source-document tracking and audit trail exist to hold, so the answer to "show me how that number was derived" doesn't depend on someone remembering which inbox the invoice landed in.

We're honestly still working out what that proportionality record should look like for very long supplier tails, the several-hundred-subcontractor case in construction. Recording the judgement per spend category is tractable. Recording it per supplier probably isn't, and Treasury hasn't said where the line sits. Worth putting in a submission if you've hit the same wall.

If you're a both-frameworks reporter with a non-June balance date, spend an afternoon this week counting the hours your team burns reconciling NGER and AASB S2 periods, and put that number in front of Treasury before 2 October.

Quick Answers

Is Treasury delaying ASRS reporting or cutting Scope 3 requirements? No. The consultation paper states directly that the changes under consideration will not affect entities reporting for the 2026-27 financial year, and that the Government is not seeking views on changes to Scope 3 emissions reporting requirements or on which entities must report.

Is the 2030 move from limited to reasonable assurance being delayed? It's under review, not delayed. Treasury has put three options out for comment: keep limited assurance permanently, defer reasonable assurance to 2035, or apply reasonable assurance only to mature metrics such as Scope 1 and 2 while Scope 3 stays at limited. Current law still has the transition starting 1 July 2030.

When does the Treasury ASRS consultation close? Submissions close Friday 2 October 2026, through the Treasury consultation hub. The consultation opened 24 August 2026.

Does this change when Group 2 and Group 3 start reporting? No. Group 2 applies to financial years beginning on or after 1 July 2026 and Group 3 from 1 July 2027. A separate Budget measure lifting the large proprietary company thresholds to $100 million revenue and $50 million assets would relieve some smaller Group 3 entities, with timing still to be confirmed.

What is Treasury proposing about Scope 3 supplier data requests? Two things: guidance on what counts as a reasonable request for information from your value chain, and possible government development or curation of domestic emission factors so reporters can rely on secondary data instead of surveying small suppliers. Treasury explicitly rejected a standardised supplier questionnaire as likely to generate unnecessary requests.

Does the consultation address the NGER and AASB S2 reporting period mismatch? Yes, as "Opportunity 1." Questions 20 to 23 ask entities subject to both frameworks about the cost of running NGER's 1 July to 30 June period alongside a different financial year, and whether existing AASB S2 flexibilities are sufficient.

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