AASB staff review: most of 484 first-year AASB S2 reports held back Scope 3

Staff of the Australian Accounting Standards Board (AASB) have put together their widest look yet at how Australia's first mandatory climate reports handled value-chain emissions. A staff paper prepared for the Board's meeting on 29 and 30 October, dated 15 October and released with the public papers on 16 October, reviews the reports of 484 Group 1 entities (187 listed and 297 unlisted) that were available to staff on 3 September 2026.

For supply chains, the headline is simple. Of those 484 entities, 433 (89.5%) said they used the first-year transition relief, which lets an entity leave Scope 3 emissions out of its first annual reporting period (AASB S2, paragraph C4(b)). Across the whole group, 57 entities (11.8%) reported at least some Scope 3 emissions. That was far more common among listed entities (24.6%) than unlisted ones (3.7%). Thirty entities used the relief and still published some Scope 3 information voluntarily.

What moved

Group 1 entities are now in their second reporting cycle. The Scope 3 relief in paragraph C4(b) applies only to an entity's first annual reporting period, so for this period those entities must disclose Scope 3 emissions. Under paragraph C5, they can still leave out last year's Scope 3 figures as comparatives. For most of those 433 entities, this is the first time a Scope 3 figure will appear in their statutory report.

The paper also shows where first-year effort went. Stakeholders interviewed by AASB staff said greenhouse gas emissions measurement and disclosure "accounted for a significant proportion of the first-year implementation effort". They singled out organisational and operational boundaries, lining up reporting periods, and how the GHG Protocol interacts with the National Greenhouse and Energy Reporting scheme.

Staff aren't proposing to change the standard. They recommend education, awareness-raising and continued monitoring, with Scope 3 emissions among the possible priority areas, and note that their outreach "did not identify matters that suggest a need for standard-setting activities at this time". They also suggest working with Treasury, the Australian Securities and Investments Commission and others on whether coordinated guidance is needed on proportionality concepts.

Two caveats keep this in proportion. It's a staff paper, not a Board decision or a standard; as at 19 October 2026 the Board had not yet considered it (it is on the agenda for 29–30 October). And, as the paper says itself, the analysis doesn't assess whether any entity complied with AASB S2 or the Corporations Act. It describes practice; it doesn't grade it.

What it means for mid-tier suppliers

For producers and processors selling into Group 1 buyers, the paper says more about timing than volume. Most of those buyers haven't yet had to put a Scope 3 figure in a statutory report. In this cycle, many will.

The rules that frame those requests haven't changed. The reporting entity uses "all reasonable and supportable information" available to it "without undue cost or effort" (paragraph B39). Estimates and industry averages remain legitimate, and the reporting obligation sits with the entity preparing the report, not with the suppliers it buys from. A buyer asking for farm data is making a commercial request, not passing on a filing.

What a supplier can usefully control is its own record: one set of activity data for the season, a calculation it can name and date, and a clear note of which figure went to which buyer. The Council of Small Business Organisations Australia made a similar point to Treasury, backing a "do it once, use many times" approach where primary supplier data is genuinely needed.

What didn't move, yet

Treasury's efficiency review. Treasury's consultation on improving the efficiency of climate-related financial disclosures took submissions until early October (the consultation paper gave 2 October as the closing date). Among other things, it asked about clearer boundaries on value-chain information requests and a possible government role in providing domestic emissions factors. As at 19 October 2026, Treasury had not published an outcome, and the AASB staff paper says staff will monitor it closely.

Agricultural emissions guidelines. As at 19 October 2026, the Department of Climate Change, Energy, the Environment and Water's guidelines page (last updated 15 September 2026) said it planned a mid-October soft release of version 1 of its voluntary emissions estimation and reporting guidelines for agriculture, fisheries and forestry: emailed to calculator developers and targeted industry stakeholders, and available to anyone else on request, with formal release planned for mid-November 2026. Agricultural Innovation Australia says it is moving its calculation engine to align with the guidelines and expects some input fields to change, while previous versions of the current calculations stay available. A figure calculated this season may therefore have a successor calculated under the new guidelines, so the method version is worth keeping next to the number.

Land-sector target-setting. The Science Based Targets initiative's call for evidence on version 2 of its Forest, Land and Agriculture Standard closed on 11 October (Pacific time), with more than 140 respondents. Version 2 is expected by or before the first quarter of 2028. Until then, companies keep setting land-sector targets under the current guidance, version 1.2. That's a target-setting framework, not a disclosure rule.

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