A Practical Guide to AASB S2 Climate Reporting
When it comes to climate-related financial disclosures under AASB S2, simply tracking emissions or setting a net zero target isn’t enough. To meet the standard, and more importantly, to provide real value to stakeholders—your climate data needs to be decision-useful.
But what exactly does “decision-useful” mean? And how can businesses ensure their climate metrics meet this bar?
In this blog, we’ll unpack this central concept, share insights from NetNada’s Compliance Countdown webinar series, and show you how to level up your reporting strategy.
Why Decision-Useful Climate Metrics Matter
The AASB S2 standard, based on the global ISSB framework, is designed to give investors and stakeholders the right information to understand how climate change affects your business—and how your business is responding.
That’s where decision-useful metrics come in.
A decision-useful metric is more than a number. It’s a climate-related datapoint that:
- Is clearly linked to business performance or financial outcomes,
- Can influence decisions made by investors, lenders, and internal teams,
- Provides insight into the resilience and strategy of your organisation.
In short: if your metrics can’t inform a financial or operational decision, they probably aren’t doing their job.
The Most Common Pitfalls in Climate Reporting
During our first Compliance Countdown session, we heard from sustainability leads, consultants, and finance professionals grappling with AASB S2 requirements. A few themes stood out, especially when it came to metrics:
Pitfall 1: Too much data, not enough direction
Businesses often present a long list of metrics (like emissions intensity, energy use, or waste volumes) without explaining what those numbers mean for their financial health, strategy, or risk profile.
Pitfall 2: No connection to decision-making
For example, one organisation shared its emissions reduction from energy efficiency programs. But there was no link to how it influenced investment, operational costs, or executive decision-making.
Without that connection, the metric loses its value.
What Makes a Metric ‘Decision-Useful’ Under AASB S2?
Here are four ways to ensure your climate-related metrics are compliant, insightful, and genuinely useful:
1. Link Metrics to Financial Outcomes
Your data should connect to cash flows, revenue, asset values, or operational costs. For example:
- Are Scope 3 emissions tied to procurement decisions?
- Does your internal carbon price affect which projects get approved?
- Has your emissions strategy lowered insurance or energy costs?
These are the kinds of insights that AASB S2 expects—and that stakeholders value.
2. Align with Strategy and Timeframes
Make sure your metrics reflect your short, medium, and long-term climate strategy. A one-off number doesn’t tell a story. But showing progress over time does.
3. Provide Context and Benchmarks
Avoid standalone figures. Compare year-on-year performance, show targets versus outcomes, and benchmark against industry standards. Is a 15% reduction in emissions meaningful? Compared to what?
4. Include Forward-Looking Indicators
Don’t just report on the past. Investors want to know where you’re headed. Include:
- Emissions targets
- Carbon pricing forecasts
- Transition risk indicators
- Scenario modelling outcomes
These metrics help prove your business is planning—not just reacting.
Real Examples Shared in Our Webinar
In our Reporting Readiness session, participants shared how they’re turning climate data into decision-making tools:
- A large infrastructure firm is using internal carbon pricing to evaluate project bids—embedding climate into every financial decision.
- Some companies are linking executive remuneration to climate KPIs, such as year-on-year Scope 1 and 2 reductions or renewable energy uptake.
- Others are building climate scenario models to forecast how warming will impact asset values over 5, 10, and 30-year horizons.
These aren’t just good practices—they’re core components of AASB S2’s expectations around climate-related financial disclosures.
Where to Start: A Quick Checklist
If you're unsure whether your climate metrics are decision-useful, ask:
- Does this metric influence a business or investment decision?
- Can it be linked to our financial performance or strategy?
- Have we explained its relevance, not just reported a number?
- Does it align with our climate risks, opportunities, and goals?
If the answer is no, it might be time to rethink how you report.
Final Thoughts: Make Metrics That Matter
Getting your climate-related disclosures right under AASB S2 doesn’t mean collecting more data—it means collecting the right data, and making sure it tells a story that’s relevant, strategic, and actionable.
At NetNada, we help companies transform climate metrics into meaningful insights that meet compliance standards and drive better decision-making.
Need help making your climate disclosures more decision-useful?
Book a call with our climate reporting experts to get started
