‘E’ = more than just climate

A global risk-management framework on nature-related financial disclosures, sponsored by the G7 and G20, is now being canvassed in Australia. Environmental protection legislation is also trending away from the approach of ‘punish pollution’ towards a requirement that business effectively manage the risk of harm to the environment. There is an increasing push to hold directors and officers personally accountable for corporate environmental offences. In parallel, environmental regulation in other jurisdictions, such as the European Union’s Regulation on Deforestation Free Products, may also affect Australian companies through their value chain. 

“This is the nuance we are starting to see,” Debenham says. “Rewind a number of years, and the sentiment was that a renewable energy project is inherently ‘good’. Now that is not the case. There’s a much more sophisticated dialogue around what ‘good’ looks like in terms of environmental and social impact. These are tricky issues for business and government to navigate in the window of necessity to decarbonise the economy.” 

With the increased focus on nature and biodiversity, a growing challenge is how to balance different (and at times, competing) ESG considerations in decision-making. A total of 25% of survey respondents cite project approval lengths as a barrier to ESG investment, with objections based on local nature and biodiversity impacts being a common cause of delay. Even renewable energy projects such as wind or solar farms can be objected to for impacting local nature and biodiversity.