Last week Mathieu Hemery attended the ESG NSW summit in Sydney, organised by Forefront events; a great event in view of the new mandatory regime starting next year for Group 1 entities.

Beyond climate though, other sustainability topics such as nature and modern slavery were tackled.

Mathieu's take away from the sessions are below:

The main macroeconomic events likely impacting ESG efforts (according to the wisdom of the crowd) were:

• Elections (US this year, AU next year) are seen as a major market and policy risk.
• The new mandatory disclosure regime, and the numerous considerations to face it: the requirements themselves, establishing boundaries in the value chain, developing knowledge and capability, understanding how to tackle scope 3 (which was a recurring theme during the day).
• In organisations, executives and Board support is perceived to be key.
• Evolution of the relationship with China.
• How to change the perception of climate risk to opportunity.
• Nature disclosures (TNFD), early stages, foundational work is needed. Expected to progress very fast in coming years.
• Worries about the tension between greenwashing risk and good sustainability stories.

What are the components of a good ESG roadmap? (panel: AMP, Accor, NBN, Endeavour Energy)

• Governance and risk management (boring, but crucial).
• Understanding what the focus should be, through materiality.
• Ensuring employee base understands well the roadmap (culture), younger employees tend to be passionate about ESG.
• Shifting the mindset from compliance / "have to" to a willingness to participate and deliver the outcome / "should be".
• Being mindful of the scrutiny from the regulator.
• Thinking of the roadmap as incremental steps.
• Sharing stories on sustainability in general or specific E or S topics through such forums.
• Embedding sustainability skillset within the business unit (instead of a siloed department).
• Translating the roadmap into value for stakeholders.

Unlocking value through IT (ran by Workiva and Climate & Decisions):

• Poll - most respondents in the room think they are in the initial stages of understanding the process (against 15% who think they have mature processes and capabilities);
• Scope 3 for suppliers and clients: integration with CRM systems, KPI.
• Will ideally require developing datasets at an industry level.
• Benchmark of the sustainability framework is the CSRD (EU).

How to leverage insights from mandatory reporting (panel: NRMA, CBA, Transurban)

• Importance of influencing stakeholders.
• The requirement for reasonable assurance puts organisations on the hook.
• Early TCFD adoption will be useful, but still additional work required for alignment with ISSB standards.
• Engagement with insurers (assets at risk).
• Double materiality assessments are better practice.
• Uplift internal capabilities.
• Specific advice:
  1. Don't waste time with non-believers
  2. Bring externals to deliver educational material to your org
  3. Keep decision makers up to date
  4. Keep energy, will be long-winded

Collaboration on scope 3 (panel: Boral, Pacific National)

• Need to understand the value chain and how to map it at a high level.
• Increased interest from customers.
• Beware of mismatch between targets set and how they can be achieved
  Example: construction company giving a net zero commitment, without engaging with their cement supplier.