au iconAU



ESG Summit 2022 – 6 takeaways

The Australian Financial Review ESG Summit was hosted at the Hilton, Sydney, on June 15, featuring the likes of Atlassian Co-Founder Mike Cannon Brookes, NSW Treasurer and Energy Minister Matthew Kean, and influential author John Elkington.

ESG Summit 2022 – 6 takeaways
smsfadviser logo

Having attended the conference, here are six key headline statements for consideration:

  1. John Elkington, who coined the ‘Triple-Bottom Line’, forecasts ‘peak ESG’

Despite the persistence and popularity of the Triple-Bottom Line (TBL) concept, its creator, John Elkington, has issued a “product recall” on the term, claiming it is “being interpreted in some ways that are not helpful”. The TBL – environment, society, economy – treats these issues separately, whereas a more integrated approach is necessary for the transition to a regenerative economy.

The collective acronym ESG is increasingly subject to similar scrutiny. For example, Professor Robert Kaplan spoke on the misplacement of ‘governance’ at the IPA and ICSB event, Why Do we Measure Economic Success with Unicorns?, while we are also often reminded to treat ESG as three separate concepts. Mr Elkington foresees a transition towards the peak of ESG terminology, although this does not mean the associated sustainable development problems and challenges cease to exist.

  1. The role of capital

Connie Sokaris, Executive, Corporate Finance at NAB, emphasised the rise in community activism, including shareholder engagement on the topic. Banks have a role to play when it comes to helping businesses decarbonise in line with emissions reduction targets, and Ms Sokaris highlighted the need for long term policies to allow the dollars to follow.

Catherine McCormack, MD, Investment Banking at Jarden criticised the lack of policy supporting the energy transition, suggesting that more collaboration between stakeholders will be necessary.

Continuing this theme, Executive Officer of the Australian Sustainability Finance Initiative (ASFI), Kristy Graham, presented at the IPA’s Sustainability Discussion Group on June 20. The ASFI Roadmap includes 37 optimistic recommendations and involves collaboration with a range of stakeholders all hoping for a common outcome. You can learn more about ASFI by visiting their website.

  1. The priorities of ASIC and the ACCC

As the pace of change is remarkably quick, Australia’s regulators are working hard to keep up to date. Sean Hughes, ASIC Commissioner, describes climate as a priority for the regulator, while they have also recently released a how to avoid greenwashing information sheet. Commissioner Hughes also recommends the use of the Task force on Climate-related Financial Disclosures (TCFD) guidelines whilst the AASB and AAUSB determine the application of the International Sustainability Standards Board (ISSB) standards here in Australia.

Additionally, Delia Rickard, Deputy Chair of the ACCC, recognises that “it is clear consumers want to make greener choices”. Furthermore, Ms Rickard assured the audience that competition law is “not necessarily a roadblock to sustainability”, as there several examples where competitors have received authority for collaboration.

  1. Purpose – empty statements or central to what we do?

Several business leaders were questioned about their organisation’s purpose, ‘why’, or reason for being. For example, could KPMG’s purpose – to inspire confidence and empower change – be applied to a multitude of organisations across any industry?

KPMG Chief Purpose Officer, Richard Boele, challenged such a remark, as a purpose is intended to enable a broad range of people to connect. Speaking on his unique role, Mr Boele described himself as the navigator, challenger, and enabler for the company, engaging in tasks such as a weekly CEO challenge.  

  1. “The transition is not linear”

The recent energy crisis on the east coast of Australia is potentially a preview of some of the bumps in the road that lay ahead for decarbonisation. Fiona Wild, Vice President, Sustainability and Climate Change at BHP, explained that the “transition is not linear”. Some years, progress may be incredibly rapid, whereas others, it may slow down or even decline. What matters is that the long-term trajectory is the required increase in renewables in line with Australia’s emission reduction targets and net zero by 2050.

  1. Procurement policies

Phillip Austin, President of pallet and container company CHEP, alluded to procurement policies as a core component of what ESG means to them. Mr Austin mentioned the need for all suppliers to meet these standards, although ensured they will help SMEs get there. This is ultimately one of the consistent aspects of ESG that will increasingly challenge small businesses to adapt.

If you have an interest in ESG developments and how they affect you, please join the IPA’s Sustainability Discussion Group here, or let us know your thoughts.

Subscribe to Public Accountant

Receive the latest news, opinion and features directly to your inbox