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Environmental, social and governance (ESG) issues are set to take centre stage at the 2022 federal election, according to two experts at CPA Australia.
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Shift in climate approach to dominate corporate proceedings in 2022
03 February 2022
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11 minute read
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Speaking on the first episode of CPA Australia’s “With Interest” podcast, Patrick Viljoen, senior manager of ESG at CPA Australia, provided host Dr Jane Rennie, general manager of external affairs at CPA Australia, with some insight into the impact ESG will have on companies throughout 2022.
Climate change policy has become one of the dominant discussion points in the lead-up to the 2022 federal election.
Citing each party’s 2030 emissions reductions target, 26-28 per cent for the Coalition and 43 per cent for Labor, as well as the need to remain internationally competitive with respect to sustainability and ESG, Mr Viljoen predicts regardless of the winner, financial regulators and corporations alike will take action of climate issues themselves.
“The regulators have been taking a risk-based approach, realising that if they don’t act, in terms of climate change and sustainability more broadly, they will fall by the wayside,” Mr Viljoen said.
“[D]efinitely from the regulator perspective we’ll see more work being done in that space and making sure that constituents, businesses, organisations are reporting more, and I think in more depth in terms of their sustainability approach and the way they embed that risk management within their organisations.”
As for how this shift in regulatory approach will impact corporations down the track, Mr Viljoen envisions that the time for “big speeches” is over, and that companies will move towards more practical approaches to their climate and sustainability goals.
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“I think the big speeches are probably over, but what we will see this year is those road maps being disclosed in terms of the broader set of financial reporting and non-financial reporting that organisations are doing. And, you know, how they have set up that road map to get to the targets and the metrics that they’ve set themselves,” Mr Viljoen said.
Mr Viljoen feels that the increasingly growing concerns from investors about where and how their money is being invested will see an increased continuation in this shift towards climate-friendly and sustainable business practices.
“We know that investors are growing more concerned in terms of where their money is being invested. So, it’s in the best interests of organisations on the ASX to make sure they are reporting in a consistent, comparable kind of way, to ensure that money still flows into them,” Mr Viljoen said.
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