What Australia’s new sustainability reporting laws can teach us about ESG.
Ever watched a group of meerkats? It’s fascinating. They’re never all looking in the same direction. While one scans the horizon, another is watching the youngsters. Another is keeping an eye on the rest of the group. Together they’re constantly aware of the bigger picture.
Corporate Australia could learn something from them.
Australia’s recently introduced mandatory sustainability reporting requirements have rightly put the spotlight on the E in ESG: Environment. For many of our largest organisations, climate-related financial reporting is no longer voluntary – it’s now a legal requirement, with the new regime being phased in between 2025 and 2027. Companies must report on climate risks, governance, strategy and emissions using Australia’s new Sustainability Reporting Standards. It’s a significant and welcome step forward.
But here’s my concern. As businesses focus on meeting their new reporting obligations on environmental impact, let’s not lose sight of something equally important. The S in ESG: Social.
Because ESG was never intended to be just about the environment. It’s about people too. Employees. Customers. Communities. Culture. Trust. Reputation.
At Cavill + Co, we’ve spent the past 30 years working exclusively in this space. Helping businesses invest in social causes that matter. Building partnerships that have longevity (my longest running is 26 years!). Partnerships that make sense to the brand and therefore garner trust and admiration from stakeholders. Partnerships that provide tangible and measurable benefit back to the business. Social impact is a given, but social impact that benefits the business in numerous ways? Now that’s a partnership that’ll survive almost anything – staff changes, strategy shifts or budget cutbacks.
Investing in a social cause is good business. Especially if you select the right cause. Healthy communities create healthy businesses. Just as the saying goes: ‘no ecology, no economy’ – the same goes for society. ‘No community, no commerce’. Just as ecology supports life, society provides the social contract that allows markets to legally operate. If communities collapse due to inequality, poor health, or unrest, supply chains break and consumer demand disappears. If you’ve been watching the news lately, you can see this is already happening in parts of the world. Australia is not immune.
That’s why the ‘S’ has never been a ‘nice to have’. It’s part of long-term business resilience. While Australia has made climate reporting mandatory, expectations around social impact continue to grow. Investors are asking tougher questions. Employees increasingly want purpose as well as pay. Customers are choosing to do business with brands whose values align with their own. Communities expect organisations to contribute positively, not simply minimise harm. Even where social reporting isn’t mandated, social performance is increasingly shaping reputation, competitive advantage and long-term value.
Making a few donations once in a while is no longer sufficient. That smacks of tokenism and has the opposite effect – breeding consumer scepticism and fuelling back lash and accusations of ‘social washing’.
This isn’t about choosing between the environment (E) and society (S). It’s about recognising that they are deeply connected.
A business can reduce its carbon footprint, but if its culture is toxic, its people disengaged or its community relationships neglected, can we really call it sustainable? Likewise, organisations doing extraordinary work in their communities shouldn’t overlook their environmental responsibilities.
The two belong together.
Australia’s new reporting laws are an important milestone. They raise the bar for environmental transparency and accountability, and that’s something to celebrate.
But let’s not make the mistake of thinking ESG has suddenly become all about carbon. The smartest organisations don’t look in just one direction. Like the humble meerkat, they keep watch on the whole landscape. Because sustainability isn’t just about protecting the planet. It’s about protecting the people who live on it.
If it’s time to review your work in the social space, reach out for a chat. This Meerkat has been watching the landscape for 30 years!
Hailey Cavill-Jaspers