Navigating Legislation & Positive Change
I’m sorry to do this to you… but I’m going to talk about change and upcoming changes in this blog. I’m aware that some of us have changed fatigue. It’s been a big few years. But I’m sad to see change have negative connotations attached (I think similarly about risk but thats for another time). Change and positive change, are indications of a world moving forward, an industry moving forward and a society that has been equipped and moving towards further action and further equipping.
In the dynamic realm of business, change is not just inevitable; it's often the catalyst for progress. As effective businesses in Australia, we find ourselves at a juncture, where the convergence of impact-driven initiatives and forthcoming legislation presents a unique opportunity to steer our organisations towards a more sustainable and prosperous future
In recent years, the concept of impact has transcended mere corporate responsibility to become a driving force behind business decisions; change and impact is becoming a part of our DNA. From environmental conservation to social change and ethical governance, the pursuit of impact has emerged as a defining characteristic of successful enterprises. We stand poised to leverage their agility and innovation to effect meaningful change within their spheres of influence.
Research indicates that companies with strong environmental, social, and governance (ESG) practices outperform their peers financially and attract investment at a higher rate. Moreover, consumers are increasingly drawn to brands that align with their values, creating a powerful incentive for businesses to prioritise impact.
Here’s the upcoming legislation you need to know about
In Australia and New Zealand, policymakers are responding to the urgent need for sustainability and accountability with a slew of upcoming legislation. From climate-related disclosures to emissions trading schemes, these regulatory frameworks are poised to reshape the business landscape and elevate the role of impact in decision-making.
While there isn't currently a single piece of upcoming sweeping ESG legislation for Australian businesses, there are several ongoing developments and future possibilities to consider:
Mandatory Climate-Related Financial Disclosures: The Australian government and the ISSB are currently developing the framework for mandatory climate-related financial disclosures. These disclosures will be similar to the recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD). Implementation of reporting is beginning in July 2024 and apply to large businesses and emitters initially, with future expansion to include medium-sized businesses in 2026. If you are a director, this is a super helpful document from the AICD).
Expansion of Modern Slavery Act Reporting Requirements: The Modern Slavery Act (2018) currently requires reporting from businesses with a consolidated revenue of $100 million or more. The government has signalled a potential future decrease in this threshold, which would bring more businesses under the Act's reporting requirements.
Evolving Regulatory Landscape: Regulatory bodies like ASIC are likely to continue issuing guidance and expectations around ESG disclosures, potentially leading to more formalised regulations in the future.
Industry-Specific Regulations: Certain industries may face specific upcoming regulations related to ESG. For example, the recently introduced Safeguard Mechanism reforms aim to incentivize emissions reduction in the industrial sector.
Here are the usual places to stay updated on potential upcoming ESG legislation:
Australian Securities & Investments Commission (ASIC): https://asic.gov.au/
Department of Climate Change and Energy (DCCE): https://www.dcceew.gov.au/
Australian Institute of Company Directors (AICD): https://www.aicd.com.au/
IFRS International Sustainability Standards Board: https://www.ifrs.org/groups/international-sustainability-standards-board/
3 Key Takeaways:
Proactive Compliance: Stay ahead of regulatory changes by monitoring upcoming legislation and proactively assessing your company's readiness to comply. Embrace impact as a guiding principle in navigating regulatory requirements, leveraging them as opportunities to enhance sustainability and drive positive change.
Strategic Integration of Impact: Embed impact considerations into your business strategy, from supply chain management to product development and stakeholder engagement. By aligning your company's objectives with broader societal goals, you can create shared value and foster long-term resilience. The SDGs are a great place to start.
Collaborative Engagement: Engage with stakeholders—from investors and customers to employees and local communities—to co-create sustainable solutions and build trust. Embrace transparency and accountability as cornerstones of your organisation's commitment to impact, forging lasting partnerships that drive collective progress.
We have a unique opportunity to lead by example, demonstrating that profitability and purpose are not mutually exclusive. By embracing impact, navigating upcoming legislation, and championing positive change, we can chart a course towards a more sustainable, equitable, and prosperous future—for our businesses, our communities, and our planet.