What the Federal Budget means for corporate sustainability
I was in Canberra this week for the Federal Budget and spent Budget Day in the lock-up scouring through the Budget papers. With the Albanese Government investing heavily in Australia’s transition to net zero and social equality measures, what should corporate sustainability professionals, and anyone with an interest in corporate sustainability, know about the Federal Budget? Check out my top five takeouts below.
One: Greenwashing is on the agenda
The Government has allocated $4.3 million in the 2023-24 financial year alone to help ASIC target greenwashing. If it wasn’t already, the message should now be clear – greenwashing is not only a reputation risk, but also a legal and regulatory risk too. How should corporates respond? As I’ve written previously, ‘green-hushing’ isn’t the answer. Telling authentic stories about your sustainability journey is the key. Read more about how to do this while earning the trust of your stakeholders in this blog from earlier this year.
Two: There are opportunities for corporates within the Government’s response to the US Inflation Reduction Act
The Government’s $2 billion Hydrogen Headstart fund is a sign the Government knows it must respond to the US Inflation Reduction Act (IRA). The IRA offers nearly AU$750 billion in new spending and tax breaks for green technology industries, and some Australian companies have already signalled they may move operations to the US to take advantage of those incentives.
In addition to the Hydrogen Headstart fund, the Budget includes significant investments to kickstart new clean energy industries in regional areas, and funds to help corporates decarbonise. Coupled with the $15 billion investment in the National Reconstruction Fund, there are now plenty of opportunities for corporates to partner with Government to commercialise technology, grow and decarbonise.
Three: Social equality issues have come to the fore
The Albanese Government has used this Budget to make a start in addressing rising inequality in Australia. Why does this matter for Australian corporates? When the Government seeks to address gender, racial and socio-economic inequality, media and regulatory attention follows.
For example, the Government has committed to publishing the gender pay gaps of employers with 100 or more workers from 2024. If your organisation has a gender pay gap, this means you have less than 12 months before you are named and shamed.
The Government has also announced $8 million investment to establish an ‘Anti-Slavery Commission’ to improve transparency in supply chains and help fight modern slavery. The creation of this Commission means the spotlight will soon be on corporate supply chains. While there is also a crackdown on corporate tax evasion with a minimum 15% domestic and global tax regime soon to be implemented.
Four: Minimum corporate climate disclosure requirements will be here soon
The Budget Papers clearly outlined Australian corporates will be required to meet minimum corporate climate disclosure requirements in the future. Corporate Australia will hear more about what this will look like over the next 12 months with any domestic disclosure requirements likely to align closely to the voluntary framework recommended by the Taskforce on Climate Related Financial Disclosures.
Five: A new environmental protection legal framework is funded and coming
The Budget makes clear that corporate Australia’s impact on the environment, beyond emissions, will increasingly become a focus over the next 12 months.
The Government has committed $214 million to develop a new environmental protection legal framework. This includes the establishment of the new ‘environment cop’ (Environment Protection Australia) and the development of new national environment standards.
These commitments will underpin the Nature Repair Market – which aims to encourage corporate investment in the restoration and protection of Australia’s environment. Running in parallel with the carbon credit market – the Nature Repair Market will be a chance for corporate Australia to demonstrate its commitment to environmental protection and restoration, and potentially meet biodiversity offset commitments.
What does this all mean for corporate sustainability professionals?
The 2023 Budget highlights the growing opportunities, as well as risks, related to sustainability action and communication for corporate Australia. As corporate sustainability and ESG issues become mainstream policy issues of the Government, it’s crucial sustainability professionals are aware of the opportunities and risks to their organisation, and communicate these to their Board, C-Suite, and people.
What to know more about how the Budget could impact your organisation? Email me at any time via chris@kaizenco.au.