Navigating the Evolving ESG Landscape: Insights from the 2024 AIRA ESG Event

The 2024 AIRA ESG event for listed companies brought together investor relations professionals, corporate executives, industry leaders, and regulatory experts to discuss the latest trends and best practices in Environmental, Social, and Governance (ESG) reporting and engagement. The event highlighted the growing importance of ESG and growing focus on ESG considerations in the corporate world and provided valuable insights into how companies can navigate this evolving landscape.

The event started with an overview of the current ESG landscape, highlighting the convergence of ESG, investor relations, and financial reporting. Speakers discussed the increasing regulatory pressures, and investor demands for transparent and comprehensive ESG disclosures. 99% of investors surveyed by EY now utilize companies’ ESG disclosures for their investment decisions. Among the key drivers for creating and protecting the long-term value were climate change, employee & customer engagement, racial equity & social justice, and rapid technological advancements and competition. This session set the stage for the subsequent discussions, underscoring the need for companies to integrate ESG considerations into their core business strategies.

One of the event's key themes was the changing regulatory environment surrounding ESG reporting in Australia and overseas. With the mandatory climate reporting kicking in for the largest Australian entities from January 2025[1], experts discussed the implications of new regulations and provided practical advice on how companies can prepare for these changes. The presenters also warned against the risk of greenwashing (focus on the environment and particularly emissions), bluewashing (focus on social aspects), greenhushing, and enterprise branding, where companies draw a few initiatives without a bigger picture, creating a false impression. Santos, Woodside, and Mercer were mentioned as companies that found themselves at the court due to alleged greenwashing.

Centuria Capital presented a notable case study, sharing its approach to meeting mandatory climate-related reporting requirements in Australia and New Zealand. This session highlighted the importance of proactive compliance and the benefits of being ahead of the regulatory curve.

Effective ESG engagement was another focal point of the event. Speakers shared best practices for communicating ESG initiatives to stakeholders, including investors, employees, and the broader community. Specific strategies for meaningful stakeholder engagement were discussed by IFM, highlighting the importance of transparency, authenticity, and ongoing dialogue. There appear to be two main objectives for engagement – improving understanding and seeking change. Among the key topics and targets for engagement, IFM noted climate & energy transition, nature & biodiversity, modern slavery, labor rights, and board composition. This session provided attendees with actionable insights to build trust and foster positive relationships with their stakeholders.

It is that trust and strong relationships with investors that were highlighted as the key tools at companies’ disposal in the session on ESG and activism. While the number of shareholder resolutions in Australia has been declining, E&S activists and civil societies have reached for new and innovative ways to agitate and seek change, such as ‘vote no’ campaigns and targeting remuneration report proposals. There has also been an increase in traditional or value-based activism, often channeled through governance and changes in leadership.

The event also delved into the latest trends in ESG reporting, moderated by Sodali & Co. Sustainability heads from Wesfarmers and Wisetech shared insights into what they are doing in this space, including innovative reporting practices and emerging standards. Interestingly, the key driver for both companies was the link between ESG and the business value and ‘peer pressure’, as opposed to marketing or compliance. This session emphasized the need for companies to stay abreast of evolving reporting standards and to improve their ESG disclosures continuously.

Data was a prominent focus throughout the event, with multiple sessions dedicated to exploring the sources, validation, and assurance of ESG data. A particularly insightful case study focused on Scope 3 emissions data from a corporate perspective, highlighting the challenges and opportunities associated with collecting and reporting this information. Speakers emphasized the importance of robust data management practices and the role of third-party verification in enhancing the credibility of ESG reports.

The event wrapped up with a forward-looking discussion on the future of ESG, where speakers highlighted emerging trends and key focus areas for companies. Topics ranged from integrating ESG into corporate strategies to the growing role of technology in ESG reporting. Additionally, the session emphasized the rising significance of social and governance factors, alongside environmental considerations. This final discussion offered valuable insights and a clear roadmap for businesses aiming to stay ahead in the fast-evolving ESG landscape.

As ESG considerations continue to gain prominence, events like this play a crucial role in helping companies stay informed and prepared for the challenges and opportunities ahead.