And why architects and makers should start paying attention.
The Australian Sustainability Reporting Standards have been in effect since 1 January 2025.
This means that some of Australia’s largest companies will be required to publicly disclose their climate-related risks, emissions and mitigation strategies as part of their financial reporting obligations. The move is part of the government’s adoption of mandatory climate-related financial disclosures, aligning Australia with global standards like those set by the International Sustainability Standards Board (ISSB).
While these new rules currently apply only to the country’s biggest players – think banks, insurers and large publicly listed companies – the implications will soon reach further. By 2027, all businesses, including architecture studios, product designers, manufacturers and even smaller furniture workshops, will likely find themselves swept into the fold. Understanding what’s coming will help you stay ahead.
So what's actually changing?
The Australian Accounting Standards Board (AASB) has introduced two sustainability standards: AASB S1 and AASB S2. These require companies with reporting obligations under Chapter 2M of the Corporations Act to prepare a new section in their annual reports: a sustainability report.
This isn’t a vague brand statement or aspirational pledge. It’s a structured, audit-ready document that outlines climate-related risks to a business (like material shortages or heatwave-exposed sites), how those risks are managed, and the company’s greenhouse gas emissions profile. AASB S2, the climate disclosure standard, is the mandatory component – and it expects businesses to report on emissions across their operations and supply chains.
Why it matters to designers and builders
Even if your practice or studio doesn’t meet the current size threshold, your clients might. And when they need to report, they’ll need data from you.
Architects will be asked about the embodied carbon of building materials. Makers might need to share where their timber is sourced or what energy is used in fabrication. Contractors will be expected to track emissions from site work.
For designers already working with sustainability-minded clients or in government procurement, this level of scrutiny won’t feel entirely new. But the difference now is scale and structure: these disclosures will be a regulatory requirement, not a nice-to-have.
Trickle-down regulation
The rollout is staged over the next three years. Group 1 entities report from 2025, Group 2 from 2026, and Group 3 (the smallest of the captured entities) from 2027. This means even modestly sized firms could be caught up before the decade is out.
The broader effect is cultural: climate accountability is becoming a baseline expectation across the industry. Design practices that don’t proactively address emissions and risk could find themselves locked out of major tenders or unable to meet client requirements.
What you can do now
The best time to prepare is before the rules catch up with you. Start by:
- Tracking material provenance and supply chain emissions
- Embedding climate risk into design briefs and specifications
- Exploring frameworks like life cycle assessments (LCA)
- Training your team in climate literacy and disclosure language
Most importantly, get comfortable talking about impact – not just intention.
Resources
- AASB S1 and S2
- ASIC Guide to Sustainability Reporting
- PwC on Sustainability Reporting Standards
- KPMG insights for industry context
