In the world of Australian climate reporting, the goalposts aren’t just moving—they’re being sharpened.

In December 2025, the Australian Accounting Standards Board (AASB) released targeted amendments to the AASB S2 Climate-related Disclosures standard. For Group 2 entities—those with reporting periods beginning 1 July 2026—these updates provide much-needed clarity, but they also underscore a critical reality: Sustainability reporting is no longer a “marketing” exercise; it is a rigorous financial accounting requirement.

At YOSIPOM, we help finance teams and sustainability leaders navigate this complexity. Here is what you need to know about the latest changes and how to stay ahead. Book a Strategy Call

What’s New? Key December 2025 Amendments

1. Clarified Scope 3 Category 15 (Financed Emissions): One of the most impactful updates clarifies how entities report Category 15 Scope 3 emissions — particularly relevant for financial institutions. Entities can now focus only on financed emissions linked to loans and investments, excluding other financial activities like insurance underwriting or facilitated services that previously created confusion. 
2. 📊 Flexible Classification for Financed Emissions: The prescriptive requirement to use the Global Industry Classification Standard (GICS) has been relaxed. Companies can now choose industry classification systems that better reflect their real exposure to climate transition risks — easing implementation for organisations operating outside traditional classification challenges. 
3. 🌍 Jurisdictional Relief on GHG Accounting Methods: Where local laws or exchanges mandate different greenhouse gas (GHG) measurement approaches, entities can apply those methods for the affected parts of their operations without double-reporting (e.g., aligning NGER reporting with AASB S2). This helps avoid duplication and reduces cost/effort — a practical relief for multi-jurisdictional reporters. 
4. 📆 Early Implementation Option: Although the amendments apply from reporting periods beginning 1 January 2027, companies can opt to apply them earlier, provided they disclose that choice, giving early movers time to align internal processes before the mandatory window. 

Why This Matters for ANZ Businesses

For Group 2 entity with revenue over $200m, assets over $500m, or 250+ employees, the first mandatory report is due for the period starting 1 July 2026. A detailed takeaway on ASRS Australian sustainability Reporting Standards report by PWC.

With over 100 climate-related disclosures required, waiting until 2026 to “find the data” can become a blocker for reporting. Companies need to build the “data muscle” today to ensure that by Year 1, Scope 1 and 2 emissions are ready for the limited assurance requirements now being phased in by the AU AASB.

These amendments reflect where global sustainability standards are headed: greater clarity, less duplication, more practicality. For Australian companies preparing for their first mandatory climate disclosure under AASB S2 — and in many cases IFRS S1/S2 frameworks this change:

Reduces unnecessary reporting burden where other regulated GHG methodologies already exist.  Helps financial sector participants focus on material financed emissions instead of broad Scope 3 obligations.  Encourages reporting that better reflects operational and risk-related realities. 

Public and private companies alike must now think beyond spreadsheets and checklists, embedding data, governance and controls that can scale with evolving standards.

Technical Spotlight: Location-Based or Market-Based Emissions?

One of the most frequent questions we hear from CFOs is: “Do we have to report both?” The answer, under AASB S2, is specifics as elaborated by BDO Understanding market-based Scope 2 emissions. Here is the breakdown:

• ✅ Location-Based (Mandatory): You must report your location-based Scope 2 emissions. These reflect the physical emissions from the average electricity grid mix where you operate. This ensures comparability across all Australian businesses.
• 🟨 Market-Based (Conditional/Voluntary): Unlike the strict dual-reporting of the global GHG Protocol, AASB S2 (Paragraph 29) only requires market-based data if you have relevant contractual instruments, such as Power Purchase Agreements (PPAs) or Renewable Energy Certificates (RECs).

The YOSIPOM Insight: If your strategy involves “greening” your supply through contracts, you should report market-based figures to tell your decarbonisation story. However, your primary compliance obligation rests on accurate location-based data.

How YOSIPOM Helps Navigate the Shift

At YOSIPOM, we work at the intersection of sustainability reporting data, NetSuite ERP, and finance leadership. The new AASB S2 amendments heighten the demand for integrated, auditable ESG data, and that’s exactly where our approach adds strategic value.

YOSIPOM, in partnership with CarbonSuite, turns your NetSuite ERP into a sustainability powerhouse:

• Automated Carbon Data Harvesting: CarbonSuite is “Built for NetSuite,” meaning it pulls activity data directly from your financial transactions. No more messy spreadsheets or manual entry errors. We help companies interpret where they sit relative to AASB S2, IFRS S1/S2, and other frameworks, aligning sustainability goals with financial reporting and risk management.
• Dual-Reporting Made Easy: Centralise and automate carbon and sustainability data collection, Align emissions outputs with reporting obligations, and Ensure disclosures are defensible, audit-ready and traceable. Whether you need to report Location-based for compliance or Market-based to show off your PPA investments, CarbonSuite handles the calculations and emission factors automatically.
• Audit-Ready Trails: With progressive assurance coming, “trust me” isn’t enough. CarbonSuite provides a transparent, traceable audit trail for every kilogram of CO2e, linked directly to the original NetSuite record.
• Practical Implementation Support: We don’t just theorize — we implement. From establishing data flows and dashboards to embedding processes that ensure consistency year-over-year, we help organisations operationalise climate reporting at pace.
• Strategic Alignment: We don’t just give you a software tool. YOSIPOM provides the Sustainability advisory to ensure your reporting aligns with your broader business strategy and the new December 2025 amendments.

Bottom Line

The December 2025 AASB S2 amendments signal both clarity and growing reporting expectations — especially around Scope 3 financed emissions and cross-jurisdictional relief. For companies in Australia preparing for their first or enhanced sustainability report, the need for structured data, systems and governance has never been clearer. 

YOSIPOM, in partnership with CarbonSuite, is here to guide finance and sustainability leaders through this complexity — turning reporting obligations into strategic insight.

Ready to get started? Contact us to understand what these changes mean for your organisation and how to position your reporting operations to be robust, efficient and future-proof.

Book a Strategy Call