Last week I attended the ESG Reporting & Disclosure Summit in Melbourne, and one message came through loud and clear: reporting is no longer just about ticking regulatory boxes or publishing a glossy sustainability PDF at the end of the year. It’s about creating the frameworks, systems, and mindsets for better decision-making – now and into the future.
As highlighted by the UN Global Compact Network Australia, good reporting should be forward-looking, values-based, and capability-building. We were reminded of a powerful Indigenous Australian perspective: we are part of the land, and the land is part of us. ESG reporting done well can help us reconnect decisions with consequences—and foster resilience across our systems, supply chains, and communities.
A New Era of Mandatory Climate Risk Reporting
A key focus of the summit was the introduction of Australia’s mandatory climate risk reporting requirements, beginning this financial year. The Australian Accounting Standards Board (AASB) outlined the scale of this change – developing these standards in just three years is a rare feat in a process that usually takes five. The goal? To provide consistency, improve capital flow, and reduce systemic risk.
For organisations in Group 1, the time to prepare is now. Standard S2 is mandatory, and it’s more rigorous than the previously voluntary TCFD framework. Importantly, this is the first regime requiring a materiality threshold assessment based on internal information flows, not just external factors. If your organisation is already exposed to material climate risks, these should have been identified. The difference is that disclosure is no longer optional.
There are time-based legal protections in place for early adopters, but these diminish across Groups 2 and 3. Waiting to act may leave organisations more exposed to regulatory and stakeholder scrutiny.
Reporting as a Catalyst for Change
One of the most powerful messages from the summit was ‘reporting is not the outcome; it’s the output’. The real value happens after reporting, when businesses use the data to improve, adapt and lead.
This was especially clear in the sessions focused on supply chain collaboration. The first step: start collecting data, even if it’s not perfect. Imperfect data sets a line of sight into priorities and sparks credible, transparent conversations across suppliers, procurement, IT, and finance
Strong ESG reporting depends on cross-functional collaboration. Finance teams become ESG storytellers, helping interpret data in context. Procurement takes a lead role in engaging suppliers and embedding sustainability into contracts. IT plays a critical role in ensuring data quality, integration and security. Together, these functions form a cohesive ESG response team.
It’s also essential to bring smaller suppliers along. Offering education, clear expectations and practical tools helps make sustainability a shared goal, rather than a top-down directive. Incentives such as early payment terms, preferred supplier programs or tools like Givvable can help support this engagement.
ESG, AI and Emerging Environmental Impacts
As digital transformation accelerates, ESG priorities are evolving too. A keynote from CSIRO’s Data61 explored the growing environmental footprint of artificial intelligence, particularly GenAI. Training large models such as GPT-3 can generate emissions comparable to dozens of long-haul flights, while the ongoing energy and water use of AI workloads is placing new pressure on data centres.
Yet, AI also presents new opportunities. From tracking bushfire risk to helping protect marine ecosystems, AI can be a powerful tool for environmental protection – when deployed responsibly. This is why a Responsible AI ESG framework is quickly becoming an essential consideration.
Investors Are Asking Deeper Questions
Representatives from Australia’s largest super funds made it clear that climate disclosure is not a distraction. Rather, it is a way to understand and manage long-term risk. One CEO summed it up well: “We don’t see risk because there’s carbon in our portfolio. We see risk because there’s carbon in the atmosphere.”
Institutional investors are increasingly focused on alignment between company values and actions. If a practice is legally compliant but falls short of public or stakeholder expectations, it still represents reputational risk. Investors are digging deeper, seeking evidence of integrity and authenticity in ESG reporting.
Nature and Biodiversity Come Into Focus
While climate continues to dominate the ESG conversation, nature is rapidly emerging as the next frontier. The biodiversity crisis is not only an environmental issue, it’s also a health and economic concern. With half of all medicines derived from nature, biodiversity loss could disrupt entire industries.
Organisations like Blackmores are starting to experiment with circularity and degrowth models. At the same time, new frameworks are being introduced to help organisations measure and report on natural capital. These range from carbon sequestration to broader co-benefits such as habitat restoration and community engagement.
In the years ahead, location-specific nature reporting is expected to carry the same weight as financial disclosures. And just like climate, it will require rigorous data, thoughtful analysis and a clear understanding of what matters most to the organisation and its stakeholders.
Final Thoughts
The tone at the summit was serious, but also optimistic. The demands of ESG reporting are increasing, but so too is the potential to embed sustainability into every aspect of business.
The key takeaway? Don’t fight the reporting process. Embrace it. Because reporting is not the work that gets in the way of the real work. Reporting is the work that enables the real work to begin.
Now is the time to build your internal capability, strengthen cross-functional collaboration and engage your wider business community. In a world where transparency is the new currency of trust, reporting is not just important – it’s essential.
Are you ready to meet your mandatory climate risk reporting obligations?
Contact us for a discussion about how we can help.
