Document ID: chunk:federal_register_of_legislation:F2024L01472:body:0:p77
Version: federal_register_of_legislation:F2024L01472
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with multi-stakeholder groups.
 3.             The feedback received by the AASB from Australian stakeholders on the IPSASB Consultation Paper Advancing Public Sector Sustainability Reporting (May 2022) indicated their preference for the Australian reporting requirements to align with any future global public-sector-specific sustainability reporting guidance. The IPSASB is undertaking its own Climate-related Disclosures project to develop a Standard that would provide not-for-profit public-sector-specific guidance on climate-related disclosures.
 4.             In accordance with the AASB Sustainability Reporting Standard-Setting Framework, the AASB added a project to its workplan to consider whether modifications to AASB S2 or guidance would need to be developed for Australian not-for-profit public sector entities. The AASB decided that the project would begin by considering the forthcoming IPSASB Exposure Draft on climate-related disclosures, which is expected to be published in October 2024.

Scalability and cost-benefit considerations for not-for-profit and smaller entities
 1.             The AASB noted scalability and cost-benefit concerns raised by stakeholders representing not-for-profit private and public sector entities and smaller entities (large proprietary companies) that would be required to comply with AASB S2 under the phase-in requirements of the Corporations Act amendments. Some of those stakeholders commented that:
          1.                     the proportionality mechanisms in the baseline of IFRS S2 are insufficient to address scalability and cost-benefit concerns for not-for-profit entities and smaller entities in Australia; and
          1.                    the level of education and upskilling required by preparers in order to implement the proposed Standards, including involving external consultants or specialists, would be expensive, require significant time and investment, and be potentially cost-prohibitive for not-for-profit entities and smaller unlisted entities.
 2.             The AASB observed that the areas of concern mainly related to the requirements to measure Scope 3 GHG emissions and to undertake climate-related scenario analysis, which are specifically mentioned in the Corporations Act amendments. The AASB decided to undertake a project to explore potential solutions for addressing scalability and cost-benefit concerns for not-for-profit entities and smaller entities.

Impact analysis
 1.             The AASB issued AASB S2 to support the Australian legislation (as outlined in the Corporations Act amendments) that requires large businesses and financial institutions to prepare climate-related financial disclosures. The AASB has been advised by the Office of Impact Analysis that the AASB does not need to undertake an Impact Analysis for the mandatory climate-related disclosure Standard on the basis that the regulatory impact has already been calculated by the Treasury in relation to the proposed legislative amendments and assessed by the OIA (refer OIA, Published Impact Analysis "Climate risk disclosure", January 2024).
 2.             As described in paragraphs BC79–BC84, some AASB members have concerns that some public sector application issues have not yet been addressed and the benefits of applying AASB S2 may not exceed the costs for some entities. However, they note