Your First Climate Disclosure Will Be Read as a Public Statement
Group 2 entities entered their first reporting period under Australia's mandatory climate reporting regime on 1 July 2026. Group 1 lodged first, with reports covering financial years that began from 1 January 2025, and Group 3 follows from July 2027. The Australian Accounting Standards Board sets the requirements through AASB S2.
Finance teams are treating the disclosure as a compliance document. Journalists, investors, customers, and competitors will read it as a public statement about what the company knows and what it plans to do.
What does AASB S2 require?
AASB S2 is Australia's mandatory climate-related financial disclosure standard. It requires an entity to disclose how climate-related risks and opportunities could affect its business, strategy, and financial performance. Scope 1 and Scope 2 greenhouse gas emissions must be disclosed from the first year, measured on a location basis, with material Scope 3 emissions following in the second year.
The phasing is deliberate. Scope 1 and 2 cover emissions a company produces and the energy it buys, both of which sit inside its own records. Scope 3 covers the supply chain and the use of products, which is where most emissions usually sit and where the measurement gets hard.
ASIC has published early observations on sustainability reporting ahead of the 30 June 2026 reporting date, which gives preparers a view of what the regulator is watching.
Why is a compliance document a communications problem?
Because a disclosure creates a public record that other people will quote back.
A climate disclosure states, in writing and under a regulated standard, what a company believes about its own exposure. Every marketing claim the company has made about sustainability now sits next to that statement, and the two have to agree. A company that has spent three years describing itself as low emissions and then discloses a material transition risk has published a contradiction, and someone will find it.
The second reason is scope creep in the audience. Investor relations teams expect analysts to read the disclosure. Trade journalists read it for the sector picture. Procurement officers at large customers read supplier disclosures as part of their own Scope 3 work. Employees read the parts about the company's plan. None of those readers were considered when the document was drafted for the regulator.
Who reads a climate disclosure?
Six audiences read it, and only one of them is the regulator.
Reader/What they take from it
ASIC
Whether the disclosure meets the standard, and whether the claims elsewhere in the market are consistent with it.
Investors and analysts
Transition risk, capital exposure, and whether the plan carries costed milestones.
Journalists
The gap between what the company says publicly and what it discloses formally.
Large customers
Supplier emissions data for their own Scope 3 calculation, which increasingly gates procurement.
Employees
Whether the organisation's stated position matches what they see internally.
AI engines
A dated, structured, authoritative source that will be retrieved and summarised for years.
The last row deserves attention. A regulated disclosure is exactly the kind of document generative engines retrieve confidently: it is dated, attributed, machine-readable, and issued by the company itself. Whatever it says about the organisation will be repeated back to buyers in AI answers long after the reporting period closes.
What goes wrong in a first disclosure?
Four failures recur.
The disclosure and the website disagree. Marketing copy written before the standard existed makes claims the disclosure does not support.
The transition plan reads as an aspiration. Targets without interim milestones, capital allocation, or named accountability invite the question of whether the plan exists.
Scope 3 is deferred without explanation. Year two is the requirement, and a company that says nothing about how it is preparing looks unprepared rather than compliant.
Nobody briefs the spokespeople. The chief executive is asked about a number in the disclosure and has not read the section it sits in.
How should a company prepare the communications side?
Five steps, all of which run before lodgement rather than after.
Audit every public sustainability claim against the draft disclosure. Website, decks, tender responses, and social posts. Fix the contradictions while the disclosure is still a draft.
Write the plain-language summary yourself. If the company does not publish an accessible explanation of its own disclosure, a journalist or an AI engine will write one from the numbers.
Prepare the difficult answers. The three hardest questions a reporter could ask about the disclosure should have agreed answers before the document is public.
Brief the spokespeople on the numbers they own. A chief executive needs the emissions figures, the transition assumptions, and the reason behind any change from last year.
Tell customers and suppliers before they read it. Large customers running their own Scope 3 calculations will use the disclosure, and a short briefing prevents a surprise.
What is the Scope 3 problem?
Scope 3 covers emissions a company does not produce directly, including those from its suppliers, its logistics, and the use of its products. For most organisations it accounts for the large majority of the total, and it is the hardest number to calculate because the data belongs to other people.
Year two is when it becomes a requirement for material categories, which means Group 2 entities are gathering it now. The communications risk sits in the size of the number. A company reporting modest Scope 1 and 2 emissions in year one, followed by a much larger Scope 3 figure in year two, will be asked why the first disclosure looked so favourable.
The answer is straightforward and needs to be given early. Scope 3 is larger for almost every company, the standard phases it deliberately, and a rising total reflects better measurement rather than worse performance. Saying that in year one costs nothing. Saying it in year two, under questioning, sounds like an excuse.
How does a disclosure change the media conversation?
Regulated disclosure gives journalists a comparable dataset across an entire sector for the first time. Until now, a reporter writing about emissions in Australian logistics had to assemble figures from voluntary reports using different methods over different periods. From this year, the figures arrive annually, on a common standard, in a form that supports direct comparison.
That produces a predictable genre of story: the ranking. Companies will be sorted, best to worst, on numbers they published themselves. A company that has thought about where it sits in that ranking, and has an answer ready for the position it will occupy, controls how it appears in the piece. A company that has not will be quoted from its disclosure and given a deadline of that afternoon.
The opportunity runs the same direction. An organisation with a credible number and a costed plan now has a comparable, verifiable proof point in a market where everyone else is making claims. That is a media asset, and it expires quickly once competitors catch up on measurement.
What does good look like?
A company with a strong first disclosure publishes three things together: the regulated document, a short plain-language explanation of what it says, and a consistent set of public claims that match both. It briefs its spokespeople, warns its customers, and treats the numbers as the start of an argument it will make for a decade.
The alternative is a document lodged quietly, discovered by a journalist, and explained under pressure. The information is identical. The reception is not.
When should preparation start?
Group 3 entities begin reporting for financial years starting from 1 July 2027, which leaves under a year to prepare. The communications work runs on a different clock from the accounting work, and it should start earlier.
Twelve months out: inventory every public sustainability claim the company has made, and mark the ones the draft disclosure will not support.
Six months out: retire or rewrite the unsupported claims quietly, well before the disclosure creates a contrast.
Three months out: draft the plain-language summary and the difficult answers, and brief the spokespeople.
At lodgement: publish the summary alongside the disclosure and notify major customers and suppliers directly.
Retiring a claim quietly a year ahead is housekeeping. Retiring it in the week of lodgement is a story.
Where a communications partner fits
Third Hemisphere works with companies across sustainability and energy and resources, and the disclosure period is where the communications programme and the compliance programme have to meet. That means reconciling public claims with regulated statements, preparing spokespeople on numbers they did not calculate, and shaping the plain-language version before someone else does. The agency's climate and ESG insights cover the surrounding questions.
The takeaway
A mandatory climate disclosure is a regulated document and a public statement at the same time, so the work of reconciling it with every existing marketing claim belongs before lodgement. Group 2 entities are inside their first reporting period now, and Group 3 has one year to prepare. Companies that want the communications side handled alongside the compliance side can get in touch.