The wave of sustainability and ESG impact has fast swept over several countries with varying degrees of implementation and peculiar approaches to the laws and regulations governing sustainability in the corporate world. While you might not have much publicity given to some countries compared to the big countries like the US and China, work is still ongoing. New Zealand and Australia have a lot going on with new impact-driving policies and set regulations. This place will highlight some of the most recent key developments and sustainability trends impacting the Australian and New Zealand corporate world.
A Bold Statement And A New Law
Without a doubt, Australia’s climate change policy has been beleaguered with many disarrays. The climate change bill 2022 may be ending the reign of that disarray and political dally in the bill. This bill was introduced by the government and is legislated in line with the audacious 2030 goal of reducing greenhouse gas emissions to 43% by 2030 and reducing it to 0 by 2030. While there is yet to be a specific requirement and obligation on companies and businesses, this Act being passed into law is a stepping stone for new policies which will shortly impact projects in various sectors. This bill passed in September 2022 is the first time Australia is legislating an economy-wide emission reduction target, so we expect a cascade of impact on businesses as this induces several new policies and reforms.
A New Mandate For Financial Disclosure
New Zealand’s climate-related financial disclosure is taking on a new turn. Pursuant to the increased recognition of the pertinence of climate-related financial disclosure, it is soon to become mandatory in New Zealand, as stated by the external reporting board XRB. The chair of the international sustainability standards board (ISSB), Emmanuel Faber pointed out the urgency of the need for climate-related financial disclosure at the Cop27. New Zealand is taking a step in the right direction as the XRB unveils that firms, large listed companies, large insurers, and managers of investment schemes of over 1 billion dollars would be mandated to make this disclosure. According to the XRB, this significantly contributes to addressing climate change and bodes well for the country. Preparation for the standard is still underway and close to completion and is expected to be published in December 2022. According to the report, the standards will be based on the financial stability board task force on climate-related financial disclosure and monitored by the financial markets authority FMA.
Another stride for the social aspects of the ESG
The Modern Slavery Act is to be reviewed with possible new reporting requirements and expansion of the category mandated to make reports, amongst other issues. The Modern Slavery Act, which was enacted in 2018, has begun to undergo some review which started earlier in March this year and has been open for public consultation. This review is meant to be completed in March 2023. With less than four months to the completion, it has been subjected to face-to-face and online consultations across Australia, including organizations in the business sector, government, and civil society.
The purpose of this Act is to encourage Australian businesses to adopt procedures that actively prevent exploitation from occurring within their supply chains rather than continuing to rely on reactive criminal justice systems to discover it. This law is said to be reviewed every three years, and its review this time or spark many discussions around several issues. So much speculation as to the impact of the Act on addressing slavery risk in the poorly understood supply chain, compliance levels, and civil penalties comes to mind. It is only a matter of time before these matters are brought to the fore. So we all await.
Quality Gasoline Requirements By 2023
Australia has just proposed more strict requirements for quality gasoline. This proposal seeks to meet emissions standards Euro 6d as they try to follow the steps of some other rich countries. The plan is to beat down aromatics in premium grade 95 on gasoline to 35% Max. According to the Federal Chamber of Automotive Industries(FCAI), the country has one of the poorest quality petrol. Better quality petrol will enable the influx of the latest model cars from other countries and manufacturers. This proposal follows an initially proposed but unfinished plan by the previous government and advances the course further.
One thing is certain; without mincing words, there is an ever-increasing demand from investors and customers for the progress of sustainability, and companies across New Zealand and Australia are stepping up. Similarly, the government and other stakeholders at the helm of the affairs set the scene to make Australia and New Zealand sustainability-driven.