Document ID: chunk:federal_register_of_legislation:F2024L01472:body:0:p72
Version: federal_register_of_legislation:F2024L01472
Segment Type: other
Provision Reference: 
Character Range: 205571–208911

required to prepare the additional financed emission information set out in paragraphs B61–B63 only from the second year of applying AASB S2. Accordingly, the AASB decided that no modification is needed relating to the requirements set out in those IFRS S2 paragraphs.
 5.             The AASB noted the ISSB confirmed that IFRS S2 requires financed emission disclosure only for insurance-related financial activities associated with an insurer's assets. In other words, IFRS S2 does not require disclosure of the 'associated emissions' of underwriting portfolios in the insurance and reinsurance industries. The AASB also noted that, for all financial activities, the ISSB decided to remove the proposal for an entity to include derivatives when calculating its financed emissions. The AASB adopted the same position as the ISSB for insurance-related financial activities and derivatives.

Other key matters considered by the AASB in developing AASB S2
 1.             Other key matters considered in developing AASB S2 but for which the AASB decided that no modification or addition to the baseline of IFRS S2 is warranted included:
          1.                     whether to specify temperature outcomes for scenario analysis;
          1.                    cross-industry remuneration disclosure;
          2.                     internal carbon prices;
          3.                    definition of carbon credits;
          4.                     carbon offsets and greenhouse gas removals; and
          5.                     superannuation entity application issues.

Whether to specify temperature outcomes for scenario analysis
 1.             The AASB decided to align with the requirements in IFRS S2 and not prescribe specific temperature outcomes for scenario analysis.
 2.             Consistent with the Treasury's second consultation paper, ED SR1 proposed to require assessment against at least two relevant possible future states, one of which must be consistent with the most ambitious global temperature goal set out in the Climate Change Act 2022 (i.e. 1.5°C above pre-industrial levels). Most stakeholders who responded to ED SR1 on this topic supported additional requirements to the baseline of IFRS S2 with respect to scenario analysis, on the basis that any additional requirements would not be a departure from IFRS S2. Specifically:
          1.                     most stakeholders supported the proposals in ED SR1;
          1.                    many stakeholders preferred the Standard to also specify a requirement to assess a high-warming scenario to ensure that a high-warming world is considered. Some of those stakeholders preferred the Standard to specify the temperature outcome to assess, but there was no consensus among stakeholders on which high-warming outcome to specify; and
          2.                     some of those stakeholders described in (a) and (b) who preferred the Standard to prescribe temperature outcome(s) also preferred specifying the scenario pathway, or the time horizon, required for each prescribed temperature outcome.
 3.             The AASB observed that those stakeholder preferences have been addressed by the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024. That Act specifies the minimum requirements relating to climate