Given the scale of the exercise to report against the new climate reporting regime, what sort of foundational steps should companies be considering now?

In this episode, we share our insights into common pain points and suggested focus areas to help identify aspects of reporting for front loading, ahead of the new regime commencing.

Now legislation for Australia’s new climate reporting regime has finally been introduced into Parliament, what impact will it have for corporates?... (and when?).

The new climate reporting regime is likely to require a significant uplift in corporate reporting – and will require considerable resources and effort over the next 12-18 months. This episode talks about how the regime will phase in, and how it might impact companies in practice.

Tim Stutt and Isabella Kelly are joined by Aaron White and Adrian Wong to discuss the soaring demand for data centres and the importance of identifying and managing ESG issues in their development and operation. Adrian provides insights on how generative AI is driving the demand for data services, the development hotspots, and the policy and regulatory levers to encourage investment. Aaron highlights the sustainability challenges that come with the growth in data centres and how they are being addressed across the market. This episode explores the need to manage these issues responsibly and raises intriguing questions: Could nuclear energy be part of the solution? How can sustainability be factored into building siting and design? What role could AI play in responding to these challenges?

For more, read our insight Data Centres: Global perspective on key issues: https://www.herbertsmithfreehills.com/insights/2024-07/data-centres-global-perspectives-on-key-issues

Jacqueline Wootton, Christopher Hicks and Isabella Kelly embark on a whistle-stop tour of the intersection of ESG and whistleblowing. They discuss why developing an effective whistleblower program is a sound investment and should be a core part of an ESG risk management system. They explore how whistleblower programs can help companies comply with a web of positive legal obligations on various ESG topics, identify and address thematic ESG issues early, and mitigate against the reputational impacts that can arise when concerns are aired publicly.

For more, read our legal briefing on ASIC’s guidance for handling whistleblower disclosures: https://www.herbertsmithfreehills.com/insights/2023-03/australia%E2%80%99s-corporate-whistleblower-protections-in-the-spotlight

Isabella Kelly is joined by Gareth Sykes, Heike Schmitz and Carolyn Pugsley for a tour of some of the key ESG reporting requirements internationally and the work that is being done to understand how they map against each other. They discuss challenges around the regimes’ differences in materiality thresholds, subject matter coverage and approaches to protection from liability. They share insights on the practical realities for companies who are grappling with how to comply with multiple regimes, including whether the same disclosures – or at least the same data – can be used, and what can be done to understand where uplift is required.

Tim Stutt and Mel Debenham are back behind the wheel to discuss HSF's second report in its ‘Unlocking ESG Investment in Australia’ series. They explore the findings of our second major survey on the barriers to deploying investment in ESG-aligned activities, and the progress in operationalising ESG considerations across business activities. The report surveyed 161 senior executives from large Australian companies and found that ESG remains a clear focus in investment decisions, although there remain challenges in deploying capital such as lack of financial return, proven technologies and access to capital. Tim and Mel explore the ‘S’ issues that are rising in prominence for Australian businesses, and discuss some of the regulatory and market changes that have occurred since HSF's first Unlocking ESG Investment in Australia Report in 2022.

For more, read the report: Stuck in the Middle? Unlocking ESG Investment in Australia 2024: https://www.herbertsmithfreehills.com/insights/reports/esg-in-australia-2024-report?utm_source=podcast&utm_medium=apple&utm_campaign=landing

Anna Coroneo and Isabella Kelly cast aside Third Wheel tradition to have a one-on-one discussion about some of the key aspects of Australia’s incoming climate reporting regime. From directors’ declarations to modified liability and assurance, Anna and Isabella discuss the uplift required of organisations as they prepare for the new requirements. They highlight what can be done now – from gaps analysis to data gathering – to front end the work to get ready for the regime. They emphasise the importance of strong governance and oversight around forward-looking disclosures, and touch on how mandatory disclosure requirements in other jurisdictions are coming into play as multinational organisations seek to streamline their compliance efforts.

For more, check out Herbert Smith Freehills’ limited podcast series, Reporting for Duties https://www.herbertsmithfreehills.com/insights/2023-08/reporting-for-duties-%E2%80%93-esg-reporting-in-australia, providing bite-sized insights on how companies are preparing to report under Australia’s future mandatory climate-related reporting regime

Lucy McCullagh, Alice Molan, Mark Hatfull and Naomi Hutchings delve into the multifaceted world of carbon offset projects working toward Australia’s net zero and nature positive goals, from regulatory considerations to project finance and structuring. Key concepts are outlined including the Carbon Farming Initiative Act, the Australian Carbon Credit Unit (ACCU) scheme and the need to comply with financial services laws. They anticipate continued growth in the offset market driven by domestic and international players, the rise of joint ventures and debt financing, whilst acknowledging integrity issues and the importance of significant collaboration and partnerships.

Jacqueline Wootton, Christine Wong and Christopher Hicks discuss the intersection between corporate criminal responsibility and ESG in a Third Wheel X Investigate 360 collaboration episode exploring governance, social licence to operate and the regulation of ESG issues under criminal standards. The serious risks associated with criminal matters are underlined, from corporate penalties and investigations through to individual prosecution and reputational consequences as well as the patchwork of inconsistent standards and methods for determining when a company will be held criminally responsible. They discuss the ongoing road to reform, including a radical change in relation to foreign bribery and the potential introduction of Deferred Prosecution Agreements. Our team conclude with some of the steps companies can take to future proof their business to respond to criminal liability and risk.

Isabella Kelly fires up the crystal ball and invites Tim Stutt and Mel Debenham to share their ESG predictions for 2024. Mel discusses the timing tightrope for decarbonisation projects, Commonwealth environmental legislative reform and a very different approach to regulation. Tim queries if there is an elastic start date for mandatory climate reporting, whilst the required corporate uplift crystallises. Shifting landscapes emerge for Australia’s Sustainable Finance Strategy, post-Voice referendum pathways, the EU’s Corporate Sustainability Due Diligence Directive and Australia’s Modern Slavery Act reform. They emphasise the important interrelationship between ESG spheres and close with some federal election musings around balancing energy policy and cost of living, social and biodiversity impacts.

For more, check out the AICD’s Climate Governance Study 2024, for which Herbert Smith Freehills conducted research into ASX 200 governance structures, and the jointly prepared guide Bringing together ESG: Board structures and sustainability.