ESG Trends in Australian Business

Australia’s corporate sector is witnessing a large shift towards sustainability, highlighted by a significant increase in Environmental, Social, and Governance (ESG) reporting. This blog explores the latest ESG-reported trends, offering actionable insights for SMEs wanting to embark on their sustainability journey.

The Rise of ESG Reporting

Recent reports show a significant 29% increase in ESG reporting in Australia’s top 200 businesses. This uptick reflects a broader recognition of the strategic value of sustainability, propelled by consumer expectations, regulatory developments, and the undeniable benefits of sustainable operations.

Emerging Trends and Insights

  • Structured Frameworks: There’s been a significant increase in the use of structured frameworks for sustainability reporting. For instance, 78% of Australia’s big businesses use the Task Force on Climate-related Financial Disclosures (TCFD) framework, highlighting a move toward standardised reporting.
  • Assurance and Credibility: With 53% of companies seeking third-party assurance for their reports, the credibility and reliability of ESG disclosures increasing, reducing risks of ‘greenwashing’.
  • SDGs at the Forefront: A noticeable alignment with United Nations SDGs, especially those focusing on climate action, economic growth, and gender equality, demonstrates a holistic approach to sustainability.
  • Climate Action as a Priority: The jump in companies with Climate Action Plans from 23% to 62% marks a robust commitment and key focus on combating climate challenges.
  • Biodiversity Awareness Rises: The engagement with the Taskforce on Nature-related Financial Disclosures (TNFD) by 31% of companies reflects a growing recognition of biodiversity and nature-related loss as a financial risk.

The Impact on SMEs

For SMEs, these trends offer both challenges and opportunities. Aligning with sustainable practices can open new markets, foster customer loyalty, and improve operational efficiencies. However, navigating the complexities of ESG reporting and sustainability initiatives can seem daunting.

Leveraging SDG Align for Your ESG Journey

As we consider the path forward, the SDG Align toolkit and self-assessment emerge as critical resources for SMEs. Tailored to simplify the ESG evaluation process, these tools enable businesses to assess their sustainability status, identify areas for improvement, and embark on a journey towards sustainability with confidence and clarity.

Conclusion

The green wave in ESG reporting among Australia’s corporate giants sets a new standard for business operations nationwide. For SMEs looking to join this movement, utilizing SDG Align’s toolkit and self-assessment can provide a clear, manageable path to sustainability.

Resources

  1. KPMG Australian Sustainability Reporting Trends (December 2023 Update): A comprehensive analysis of sustainability reporting trends among Australia’s largest companies, highlighting the adoption of frameworks, assurance practices, and alignment with SDGs. View Report
  2. PwC Australia ESG Reporting Among ASX200 (2021): Insights into the improvement of ESG reporting among the ASX200, detailing strategic timeframes, the prevalence of net-zero targets, and diversity policies. Read More

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