Why ESG is becoming a key priority for Australian businesses

By Olivia Dodd

F or Australian organisations, as in the UK, ESG (Environmental, Social and Governance) considerations are becoming an integral part of operations.

ESG is a framework used to assess a company’s sustainability and ethical impact, encompassing factors like resource usage, labour practices, and governance structures.

Last year, Australia’s House of Representatives voted to pass the Treasury Laws Amendment bill, which included compulsory climate-related reporting for large and medium sized companies. Since January 2025, businesses are required to disclose environmental risks and greenhouse gas emissions through annual sustainability reports.

With Australia’s changing climate leading to more frequent extreme weather events, organisations’ ESG practices are being scrutinised now more than ever. Back in 2021, accounting firm PwC conducted research for its Global Investor ESG Survey, which found that an organisation’s performance against ESG metrics has become a serious consideration for investors globally. There are even investment funds on the Australian Securities Exchange (ASX) which are specifically ESG driven. ESG funds under management in Australia now exceed $1 billion.

There are a number of ways Australian businesses can reduce their environmental impact, including by:

Strengthening energy efficiency and adopting renewable energy
Conserving natural resources
Managing waste responsibly
Reducing carbon emissions

From a social perspective, businesses can also report on:

Ethical labour practices (including human rights, workplace safety and wage equality)
Strategies used to support diversity and inclusion
Community engagement
Charity involvement

Challenges of ESG communications

As with many new initiatives, companies sometimes address ESG as an afterthought rather than being a part of day-to-day operations. Recently, a number of large businesses have also been accused in the media of ‘green washing’, providing investors and the public with misleading or false information about the environmental impact of their operations.

‘Greenhushing’ is another term often used for companies who downplay or stay quiet about their environmental efforts – often due to fear of being criticised if they don’t meet their goals.

"Ultimately, transparency is the key when it comes to ESG communications."

Oivia Dodd Fourth Day Australia

Ultimately, transparency is the key when it comes to ESG communications. Businesses should aim to establish a clear and achievable framework for delivery – setting clear goals and delivering on them.

To successfully communicate how businesses are incorporating these measures and meeting their ESG obligations, many organisations are seeking help from professional consultancies, to set the framework, manage key messaging and track compliance.

Here at Fourth Day, we have been helping businesses redefine their ESG communications strategies. Taking the time to invest in a strong ESG profile can reinforce a company’s brand with customers and investors alike.

Specifically, we specialise in assisting companies to:

Clearly define organisational goals – how the business will meet the proposed ESG framework.
Develop and distribute internal communications – ensuring employees are aware of their ESG responsibilities.
Provide transparency – ultimately, ensuring staff, customers and investors can clearly see exactly how the business is meeting ESG requirements.
Enhance the company’s reputation – consumers and investors alike want companies to operate ethically and demonstrate a commitment to improving their environmental, social and governance practices.

When creating an ESG communications strategy, it’s essential to ensure it reflects the company’s brand identity and overall corporate communications strategy. An outstanding ESG communications plan should tell a story – explaining to your customers, investors and internal staff exactly why these issues are important to the organisation and why following these principles drives business performance.