Big news! Mandatory ESG reporting is coming to Australia next year (2024) for large companies and financial institutions.
This makes our Aussie neighbours the latest in a rapidly-growing chain of nations that are introducing some form of mandatory ESG (Environmental, Social, and Governance) reporting requirements.
In the UK, more than 1,300 of the largest UK-registered companies and financial institutions have had to disclose climate-related financial information since April 2022 – in line with recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD). This made Britain the first G20 country to enshrine in law mandatory TCFD-aligned requirements. The law impacts many of the UK’s largest traded companies, banks and insurers, as well as private companies with over 500 employees and £500 million in turnover.
The same rumblings are happening in the US, the European Union, Japan, Canada, South Africa, and more.
Here in Aotearoa New Zealand, mandatory ESG reporting was implemented six months ago in January 2023. Currently, this only impacts about 200 Kiwi businesses but it is a sign of things to come for all businesses as the world picks up the pace in order to meet international obligations and the target of net zero carbon by 2050.
Presently, the majority of large financial organisations provide limited to no information on what climate change might mean for them or are reporting in inconsistent ways. The goal of mandatory climate-related disclosures is to:
- ensure that the effects of climate change are routinely considered in business, investment, lending and insurance underwriting decisions
- help climate reporting entities better demonstrate responsibility and foresight in their consideration of climate issues
- lead to more efficient allocation of capital, and help smooth the transition to a more sustainable, low emissions economy.
Mandatory ESG reporting for all businesses is now a matter of ‘when’ not ‘if’. And like the match that starts a fire, this will spark other shifts in the market place, in fact this is already happening.
More businesses, organisations and local councils, are looking to clean up their supply chains and improve their own impact reports by giving preference to doing business with companies that can demonstrate they’re on top of their own ESG monitoring and reporting. Businesses that can verify their sustainability claims, through a certification such as B Corp, will have a powerful market advantage. We wrote about this in an earlier blog called New EU corporate due diligence law is a big deal… and opportunity
So one thing you can do to get ahead of the raft of legislation changes that are on the way is to use the B Corp Impact Assessment framework.
This framework is free to access and provide dozens of useful insights and opportunities for any business.
But if you find it a bit complicated and would benefit from some help, just ask. We are consultants who have completed the official training provided by B Lab, the organisation that runs the B Corp certification programme. We live, breathe and sleep B Corp.
You can use your Business as a Force for Good.
Just get started. Take the first step. Get in touch.
Yours in purpose,
Are you Ready to B Better?
Ready to take the plunge towards becoming a B Corp business? Let the Grow Good team guide you through the process either through 1:1 coaching or group coaching on one of our regular cohort programmes for micro businesses. Book a 30-min discovery call with Tamara here.