AASB S2 paragraph 29(a) requires you to measure Scope 1, 2 and 3 under the GHG Protocol Corporate Standard (2004). AASB S2 then removes some of the choices the GHG Protocol gives you, and adds some requirements.
What does AASB S2 change?
Topic | GHG Protocol | AASB S2 |
Reporting entity and period | The company decides | The same entity and period as your financial statements |
Consolidation approach | Equity share, financial control or operational control | Still your choice. Disclose which one you use |
Scope 1 and 2 split | One total for each scope | Split between the consolidated accounting group and other investees (associates, joint ventures and unconsolidated subsidiaries) (29(a)(iv)) |
Scope 2 | Location-based and market-based figures (Scope 2 Guidance, 2015) | Location-based required, plus information about your contractual instruments |
Scope 3 | Optional in the Corporate Standard. The Scope 3 Standard (2011) requires all relevant categories and a reason for each exclusion | Required. It can be left out in your first year (C4(b)). Consider all 15 categories, and disclose which ones you include |
Optional parts of a category | Optional (Scope 3 Technical Guidance, Table I) | Include it if it is material |
Leaving something out | Relevance criteria decide. There is no de minimis threshold | Materiality decides |
Measurement method | GHG Protocol methods | GHG Protocol methods, with AR6 GWP values (AusB22.1). For the part of the entity NGER applies to, NGER methods (B24). NGER GWP values only under AASB S2025-1, for periods beginning on or after 1 January 2027, or earlier if you disclose it (C1B) |
Base year | Set one to track emissions over time | Not required unless you disclose targets |
What does "optional becomes include it if material" mean?
Table I of the Scope 3 Technical Guidance marks some parts of a category as optional. Under AASB S2 there is no optional status. Test each optional part for materiality. If it is material, include it. If it is not, record your estimate and the reason.
Bluegum applies this in FY26:
Optional part | Bluegum's estimate | Decision |
Category 7: employee teleworking | Head office staff work from home 2 days a week. About 12 tCO2e, 0.08% of Scope 3 | Not material. Estimate and reason recorded |
Category 5: transport of waste | Waste from the distribution centre and the factory. About 6 tCO2e, 0.04% of Scope 3 | Not material. Estimate and reason recorded |
Under AASB S2, information is material if "omitting, misstating or obscuring that information could reasonably be expected to influence decisions that primary users" make (Appendix D paragraph 18). This also applies when you present an item in a way that hides it. Size is one input. The nature of an item can also make it material, for example when it carries a transition risk. See Exclude something and defend the exclusion.
What can you leave out under AASB S2?
An item that is not material. Record the estimate and the reason. An item left out of Scope 1 and 2 does not move to Scope 3. It stays out, with its record.
All of Scope 3 in your first year, under C4(b). From your second year, Scope 3 is required.
An item you cannot measure. This is rare. AASB S2 lets you use "reasonable and supportable information that is available without undue cost or effort". That rule governs which information you use to measure. It does not let you leave out a material category. If data is poor, estimate with what you have, such as spend-based factors, and disclose the method. AASB S2 presumes Scope 3 can be estimated using secondary data and industry averages. Only if you cannot estimate it after every reasonable effort is it impracticable. Then disclose how you are managing those emissions (B57). Keep the evidence of the effort you made.
How does the investee split work?
Under 29(a)(iv), you split Scope 1 and 2 into two lines.
Line 1 is your parent and consolidated subsidiaries, plus your share of any joint operation your accounts include line by line.
Line 2 is the share of any other investee you include in Scope 1 and 2 under your approach, such as a joint venture under joint control.
Disclose both lines, even when one is nil, and say which approach you used to measure them. The result depends on your consolidation approach.
Approach | Consolidated accounting group | Other investees |
Financial control (Bluegum) | Bluegum Group Holdings, Bluegum Outdoor Supply, Summit Packs at 100%, Trailhead Rentals from 1 March 2026, Bluegum NZ at nil: 3,545 tCO2e | Coastline Kayaks (50% joint venture under joint control) at 50%: 300 tCO2e. Ridgeline Supply (25% associate) is not in Scope 1 and 2. Bluegum's 25% share of its Scope 1 and 2 goes in Category 15 |
Equity share | The same entities, with Summit Packs at 70% | Coastline Kayaks at 50% and Ridgeline Supply at 25% |
Operational control | The consolidated entities and the sites they operate | Any investee the group operates, such as a joint venture it runs, at 100%. A joint venture that no partner operates alone is not in Scope 1 and 2. Your share of its Scope 1 and 2 goes in Category 15 |
Bluegum's FY26 Scope 1 and 2 under financial control is 3,845 tCO2e: 3,545 on line 1 and 300 on line 2. See Joint ventures, associates, investments and franchises.
What stays your choice?
The consolidation approach. We recommend financial control. It follows your financial statements, so it is the simplest approach to understand and to reconcile. AASB S2 already ties your reporting entity to those statements. If you reuse NGER figures, that part follows NGER's operational control. See How the NGER, AASB S2 and GHG Protocol boundaries differ and Equity share, financial control and operational control compared.
Your calculation methods for each category, such as spend-based or activity-based data.
Your base year and recalculation policy, if you set one. See Set a base year and recalculate it.
What this means in Avarni
Avarni records Scope 2 in two GHG categories, Location based and Market based. Report the Location based figure as your required Scope 2. Use the Market based figure to support your information about contractual instruments. Disclose them as separate lines. Do not add them. Contractual instruments for electricity in Category 8 are not Scope 2 instruments. An example is GreenPower bought for operating-leased stores under financial control. Report them with Category 8, not against Scope 2.
To show the investee split, create a custom field under Settings › Custom Fields, such as "Investee line". Set it on each row, then group by it in the Emissions Hub.
Record the status of each of the 15 Scope 3 categories in your boundary document: included, not material (with the estimate), or not applicable. See What goes in your boundary document.
If you disclose targets, set your Baseline Year under Forecasting.