Amid global sustainability pressures, ESG reporting in Australia is fast becoming a central issue for businesses of all sizes. It is not just about compliance, but also a driver of competitiveness and resilience. The country’s ESG landscape is changing rapidly in 2025, setting new standards for how companies measure, disclose, and act on their environmental, social, and governance impacts.
Why ESG Reporting Matters in Australia
Australian businesses face increasing scrutiny from regulators, investors, and customers to provide transparent and credible ESG disclosures. Historically, voluntary frameworks like the TCFD and GRI set the tone for corporate reports, but government policy now demands more. In August 2024, the Australian Parliament passed legislation formalizing mandatory climate-related disclosures for large entities. These requirements will roll out from January 2025, with phased implementation for medium-sized companies in subsequent years.
These new rules closely align domestic reporting with the International Sustainability Standards Board (ISSB) framework, meaning climate and ESG data will soon rank on par with financial statements for public and private firms.
Key Trends in 2025
Mandatory Disclosure Requirements: Large listed and unlisted entities—those with substantial assets, revenue, or employees—must release annual sustainability reports. This requirement begins with the 2025 financial year. Smaller businesses will be included in later phases. Indirect pressure will cascade through supply chains as larger clients demand ESG data from their partners.
Investor Expectations: Responsible investment in Australia surged to $1.6 trillion in 2023, with sustainable investing representing a growing share of professionally managed assets—well above a third of the market, and rising.
Climate Transition Planning: Disclosures now go beyond historical emissions. Companies must show forward-looking transition plans, scenario analyses, and strategies to decarbonize, testing business resilience under various temperature rise scenarios.
Technology-Driven Reporting: Firms are investing in ESG and carbon accounting platforms powered by AI and digital automation. These tools ensure accurate, real-time data capture across environmental, labor, and governance metrics.
Global Alignment: As supply chains become more international, Australian companies must harmonize disclosures with standards like the EU CSRD and align with ongoing ISSB updates to stay competitive across markets.
Challenges for Australian Businesses
Data Collection and Accuracy: Gathering reliable ESG data, especially for Scope 3 emissions from suppliers and product use, remains complex and resource-intensive.
Cost of Compliance: Smaller firms face additional strain competing for ESG talent and adopting sophisticated software tools. Failure to engage risks exclusion from new capital flows.
Risk of Greenwashing: The Australian Securities and Investments Commission (ASIC) made 47 regulatory interventions on greenwashing between April 2023 and June 2024, sending a clear message that misleading claims risk penalties and reputational damage.
Rapidly Changing Standards: The environment is dynamic—global frameworks and local regulations are continually evolving. Businesses must remain agile and proactive or risk falling out of compliance.
Opportunities for Leaders
Stronger Investor Confidence: Investors increasingly scrutinize ESG data alongside financial metrics. Firms with transparent disclosures enjoy better financing terms and greater access to domestic and global capital.
Customer Loyalty: According to PwC’s 2024 Voice of the Consumer Survey, 68% of Australian consumers are willing to pay more for products with a lower carbon footprint, reinforcing the influence of credible sustainability practices on brand preference.
Operational Efficiency: Accurate ESG reporting uncovers opportunities for cost savings through improved energy, supply chain, and governance management.
Global Competitiveness: Businesses with robust ESG frameworks can operate more freely in markets with strict carbon border regulations, like the EU’s CBAM.
Conduct a Gap Analysis: Assess current ESG policies against new Australian and international standards, and pinpoint data or governance gaps.
Invest in Expertise: Partnering with ESG consultants—such as Clenergize—can help align reporting with ISSB, EU CSRD, and EcoVadis frameworks while unlocking strategic value across supply chains.
Integrate ESG Into Strategy: Move beyond reporting and embed sustainability into all aspects of corporate planning. This includes energy use, supply chain governance, community engagement, and risk management.
The Bigger Picture
For Australian companies, ESG reporting in 2025 is more than a regulatory box to tick—it’s about securing a place in the next wave of sustainable business. Those that act early and strategically will attract capital, boost their brand, and position themselves for growth in a changing global economy. Advisory firms like Clenergize are already helping organizations build effective, future-proof ESG strategies that bridge compliance and long-term impact.
The message is clear: ESG reporting in Australia is now a business imperative. Companies that adapt quickly will thrive as trusted leaders in sustainability.
