The Third Wheel podcast series: ESG in Australia

Each episode, Partners Timothy Stutt and Melanie Debenham are joined by an expert third wheel guest to explore the issues from their unique perspectives.

Mel is an expert on business-critical environment, planning, heritage and native title regulation in Australia. Tim specialises in ESG from a corporate governance perspective, including market disclosure, risk management and shareholder engagement/activism.

Latest episode

Episode 47: 2024 (Gift) Wrapped

In the final episode of The Third Wheel for 2024, Tim Stutt and Mel Debenham reflect on the year’s ESG developments and look ahead to 2025. They discuss the recent governmental response to the statutory review of the Modern Slavery Act 2018 (Cth); the winding path of nature positive reforms in Australia; preparations ahead of the first year of reporting under the new climate reporting regime; and the growing focus on nature-related disclosures. The episode closes with their thoughts on a possible pendulum swing towards greater scrutiny of proposed ESG regulations moving forward, as regulatory fatigue sets in and having regard to changes in sentiment locally and abroad.

Episode 46: ESG x Tech: A spotlight on data centres

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

Episode 45: Whistleblowing systems and ESG risk management

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. 

Episode 44 ESG without borders: International reporting perspectives

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.

Special Episode: Stuck in the Middle? Unlocking ESG Investment

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.

Episode 42 Climate reporting – the preparation starts now

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, providing bite-sized insights on how companies are preparing to report under Australia’s future mandatory climate-related reporting regime.

Episode 41 – So you want to be a carbon farmer?

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.

Episode 40 – Corporate Crossroads - ESG and Criminal Responsibility

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.

Episode 39 – The ESG Crystal Ball for 2024

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.

Episode 38 – COP28 – the debrief with Silke Goldberg

Tim Stutt and Mel Debenham are joined by Silke Goldberg to debrief COP28 through the lens of four paradigm shifts – (1) climate finance, (2) fast tracking the energy transition and emissions reduction, (3) nature and people, and (4) the “just transition”. They close with reflections on the vital role of lawyers and the legal industry in bridging gaps and fostering agreement.

For more, check out our COP28 hub.

Episode 37 – Future of Work – New challenges, new norms

Olga Klimczak, Natalie Gaspar and Shiv Jhinku take the wheel to explore HSF’s latest Future of Work report. They unpack the key ESG related findings including cost of living, pay and benefit inequalities as a potential trigger for activism, as well as a significant rise in demand for workplace health and wellbeing support. With Australia on the cusp of profound legislative change, and a raft of new sustainability reporting standards increasing business scrutiny, we discuss the new opportunities this provides to proactively and meaningfully engage with employees, particularly in light of Generation Z’s entrance into the workforce.

For more, check out our report: Future of Work 2023.

Episode 36 – Australia releases its Sustainable Finance Strategy

Lucy McCullagh, Alice Molan and Anna Coroneo return to “the wheel” to discuss Australia’s Sustainable Finance Strategy, recently released by Treasury and including a range of measures to underpin sustainable finance markets as the country transitions to net zero. They unpack the strategy’s three core pillars, being improved transparency through credible and accurate information, financial system capabilities, government commitments and leadership on aligning to global frameworks.

Episode 35 – A COP of action?

Lewis McDonald, Carolyn Pugsley and Tim Stutt set the scene ahead of COP28 in Dubai with a stocktake of past COPs and sign-posts to the way forward, including new "regulatory technology" and continued investment to support innovation across the energy transition. They also discuss the ‘trilemma’ of energy security, affordability and sustainability.

Episode 34 – Global Bank Review – Balancing Acts

Jacqueline Wootton, Hannah Cassidy and Antony Crockett take the wheel to explore trust in banking, as the sector faces a number of stress tests, including carving out credible positions on social and climate issues, creating new carbon offset markets which operate with integrity and transparency and other challenges explored in HSF’s latest edition of the annual Global Bank Review. They discuss how embracing calls for greater diligence, disclosure, reporting and transparency around ESG issues across the wider business sector might just help banks to balance the competing demands - meeting shareholder expectations and leading on social imperatives. 

Episode 33 – Sustainable Finance 2023 – Australia’s time to lead

Lucy McCullagh, Alice Molan and Anna Coroneo take the wheel to debrief their key takeaways from the Australian Sustainable Finance Summit 2023, including Australia’s progress toward a financial system aligned with sustainability commitments, the creation of an Australian sustainable finance taxonomy, the development of disclosure and reporting standards and the importance of transition financing. They discuss recent innovations such as taking longer term approaches to natural capital and the environment, ongoing partnerships with First Nations communities for better outcomes and the provision of “Blended Finance” to bridge the execution gap between intent and bankable opportunities.

Episode 32 – A First Nations Voice in the Australian Constitution

Episode 31 – Climate Governance Forum 2023 – a call to action

For more, read our latest legal briefing on Australia’s proposed mandatory climate reporting regime and short podcast series Reporting for Duties.

Episode 30– Is the Australian Modern Slavery Act moving into a new phase?

Tim Stutt and Aoife Xuereb are joined by Jacqueline Wootton and Olga Klimczak for a Talking Shop X The Third Wheel podcast collaboration episode. Following the statutory review of the Modern Slavery Act and its report being tabled in parliament, the Government is yet to confirm its position in relation to the reform recommendations, many of which seek to align with overseas regulatory trends for enhanced human rights due diligence, supply chain transparency and penalties to support corporate accountability. Our team discuss the importance of monitoring developments, applying a continuous improvement approach to supply chain risk identification and management (which can be particularly complex in the consumer sector) and working to ensure your business has in place robust payroll compliance governance processes. For more, read our recent legal briefing on the Modern Slavery Act review or visit our Business and Human Rights hub.

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