small business owner at a brewery

Sustainability for Business in Australia

small business owner at a brewery

Why sustainability?

Australian companies will increasingly be required to report on their environmental, social and governance (ESG) impacts.  The objective is to encourage Australian companies to become more sustainable for their benefit and the benefit of society.

These changes will be implemented in stages through various forms such as guidelines, legislation and public reporting processes.  The focus will initially be on large companies, and then cascade down to all levels of business including SMEs.  The process has already started.

In addition. stakeholders will increasingly be seeking ESG reporting information to help them make business and consumer decisions. These include investors, employees, customers and regulators. Reporting on various aspects of ESG will increasingly be required by export markets such as the European Union. 

Assessing a company’s ESG aspects can also help identify hidden costs, such as wasted energy. Once identified, a company is better positioned to address the underlying causes and reap the benefits which may include those outlined below. Ultimately, a company becomes more sustainable and increases its value.

The requirements

The focus in Australia will initially be on reporting environmental impacts such as greenhouse gas emissions.  This is driven by Australia’s commitment to helping the world to reduce the impacts of climate change by achieving a 43% reduction in our emissions by 2030 and net-zero emissions by 2050.

The key legislative requirements in Australia are summarised below:

National Greenhouse and Energy Reporting Scheme (NGER), which comprises the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) and its Regulations which require companies to report on their greenhouse gas emissions and emission reduction strategies.

The Safeguard Mechanism sets legislated limits, known as baselines, on the greenhouse gas emissions of Australia’s largest industrial facilities, which are required to reduce their emissions in line with Australia’s climate targets.

Financial reporting standards are also being introduced requiring all companies (based on criteria) to report on the financial impacts of their operation on the environment.  As a consequence, such information will be made public through annual reporting processes.

The sustainability challenge

The objective of ESG reporting is to ensure companies don’t just report on their financial outcomes, but also the environmental and social impacts they have on the world and society, including financial implications for the company itself.  It is an essential part of being a good corporate citizen and makes good business sense. Investment agencies will increasingly use ESG reports to rate companies on ESG indicators. These ESG ratings matter because investors will prefer companies with better overall ESG ratings, making it easier for such companies to acquire capital. A significant portion of ESG reports include metrics used to measure performance such aspects as climate impacts, social and governance issues.  The concept of ‘materiality’ is critical because a company is usually only required to report on those aspects that are relevant and where a company’s activity or resource use has a significant impact on society. ESG risk is another key factor that is often included in such reporting. These risks include a company’s environmental, social, and governance factors that could harm its reputation or lead to financial liability. All Australian companies including SMEs that supply larger companies should now start preparing for sustainability reporting requirements because their customers will be requiring it.  Starting sooner gives an SME time to properly implement and refine its sustainability practices and gain credentials with its market. Eventually, most companies will be required to report on sustainability indicators.  Therefore, now is the time to take action. Access to professional help is currently readily available, and benefits such as those outlined above will be achieved more readily and quickly for companies.

Making it happen

Implementing sustainability measurement and reporting is a critical step for companies looking to align with environmental, social, and governance (ESG) principles.  Like any worthwhile business initiatives, it needs structure and resourcing.  Below is an outline of the steps and activities to make it happen:

1. Leadership Commitment:

2. Materiality Assessment:

3. Stakeholder Engagement:

4. Set Goals and Targets:

5. Data Collection and Management:

6. Reporting Framework Selection:

7. Develop Reporting Protocols:

9. External Assurance (Optional):

10. Report Publication:

11. Legal and Regulatory Compliance:

12. Continuous Improvement

By following these steps, a company can establish a robust sustainability measurement and reporting framework that aligns with its business strategy and achieves the company’s commitment to long-term environmental and social responsibility.

For further advice on implementing sustainability contact me on 0402 843 314 or  I can link with various experts in the field that can meet your company’s needs regarding sustainability and advise you on accessing grants and other forms of government support.  The initial decision is to make a strategic assessment and decision about your sustainability actions, so let me help you do that first.


John Tedesco. Business Innovation Services

Mob 0402 843314


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