Keeping Up With ESG In Australia – December 2025

Welcome to the December edition of Herbert Smith Freehills Kramer's Australian ESG bulletin, 'Keeping Up with ESG'.

Our monthly ESG bulletin provides a targeted snapshot of key developments we see as reflecting the "must know" trends in the Australian market. In this bumper edition to close out 2025, we spotlight key developments in climate litigation over the last couple of months in Australia and beyond.

Key highlights

1. In the spotlight: Key developments in climate litigation Australia and beyond

• Australia:
  • Conservation groups contest approval of the North-West Shelf gas project extension
  • Climate Integrity requests the ACCC investigate claims made by oil and gas industry body
  • ASIC's regulatory action
  • Ad Standards dismisses complaints concerning alleged misleading and false environmental claims
  • Appeal lodged by Torres Strait Islander Elders over Federal Court's Climate Change Decision
• International:
  • French Court finds in favour of Greenpeace in Total Energies greenwashing case
  • Case brought against Shell by group affected by Typhoon Odette
  • Exxon files claim to challenge California's climate disclosure laws and Appeals Court grants injunction requested by US Chamber of Commerce

1. Round up of ESG Shareholder activism at AGMs
2. Round up of COP30
3. Round up of key workplace laws and safety updates

• New psychosocial health regulations in Victoria
• Victoria introduces Act to restrict the use of NDAs to silence victims of work-related sexual harassment
• Women's workplace safety has declined over the last decade
• SafeWork Australia has updated its WHS Code of Practice on managing fatigue in the workplace
• WGEA Report – 2025 Gender Insights
• FWC hands down its decision on the first "just transition" case

1. EU Parliament approves a Provisional Agreement on the Omnibus I Directive
2. Victorian EPA publishes draft guidance for minimising pollution and waste in changing climate
3. UNEP releases responsible financing and investment report
4. AUASB releases sustainability consultations
5. New Zealand Government amends scope and liability provisions of climate reporting regime
6. Insights from the ASIC Whistleblower Questionnaire: Report 827
7. New Educational Material: Disclosing information about anticipated financial effects

In the spotlight: Australia sets 2035 climate target ahead of COP30

UNEP's 2025 Global Climate Litigation Report sets the stage for this spotlight on recent climate litigation developments in Australia. While the global surge in filings following the Paris Agreement has moderated, Australia remains a global leader in climate-related litigation by volume. The 2025 report highlights the diverse strategies being deployed globally, including greenwashing claims, human rights-based arguments, and environment and biodiversity claims.

Australia is identified as a key epicentre for climate-washing and greenwashing litigation, with expectations that regulatory scrutiny will intensify, particularly around carbon-credit marketing and "green" financial products. In contrast, although human rights-based climate cases are gaining traction worldwide, they have struggled to gain a foothold in Australia, largely due to the absence of certain legal mechanisms that are found in other jurisdictions. Nevertheless, the growing global momentum in this area is likely to influence the Australian landscape. Reflecting the continued activity of this space, we outline below some of the latest developments.

Australia: Conservation groups contest approval of gas project extension

On 10 October 2025, two plaintiff groups filed separate applications in the Federal Court, seeking judicial review of the Federal Environment Minister's decision to approve a gas field project extension.
In their applications, the applicants have sought review of whether the Federal Minister followed due process in considering the potential economic and social outcomes for local heritage, including effects on tourism, visitor amenity and rock art. The Federal Minister has issued a statement indicating that he considers his decision was made in accordance with law and with conditions designed to prevent negative outcomes.

On 27 October 2025, one of the applicants filed a second application in the Federal Court, seeking judicial review of the Federal Environment Minister's conditional approval of the project. Their argument is that the Minister was not permitted to exclude climate related considerations when determining whether, and how, to undertake the assessment under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). (EPBC Act).

On 14 November 2025, the UN Special Rapporteur on the Human Right to a Clean, Healthy and Sustainable Environment (UN Special Rapporteur) made an application for leave to intervene as amicus curiae in the proceedings. Counsel for the UN Special Rapporteur submitted that she would be able to provide submissions with respect to Australia's international legal obligations and the relevance of these obligations to the statutory construction of the EPBC Act. The application has been permitted by the Court and will be decided upon ahead of the hearing listed for July 2026.

Australia: Climate Integrity requests the ACCC investigate claims made by oil and gas industry body

On 24 September 2025, the Environmental Defenders Office, acting for Climate Integrity, wrote to the Australian Competition and Consumer Commission (ACCC) requesting that it consider certain claims made by an industry body in response to the government's consultation on the Future Gas Strategy. The letter expressed concern about representations made in an independent assessment report (Independent Report) commissioned by the industry body and a subsequent media release. Climate Integrity submits that some of the statements made may be misleading or deceptive, or are likely to mislead or deceive, contrary to section 18 of the Australian Consumer Law (ACL).

Climate Integrity's letter also requests that, in the event the ACCC finds the industry body has contravened section 18 of the ACL, the ACCC also review whether the consultants who produced the Independent Report are an accessory to the contravention.

Australia: ASIC's regulatory action

Court proceedings

ASIC has commenced civil penalty proceedings against a responsible entity in relation to one of its funds which was marketed as being socially conscious (the Fund).

According to ASIC's statement of claim, it is alleged that the responsible entity:

• invested in certain companies, including mining companies, in a way ASIC considers may not have been fully consistent with the investment strategy described in the Fund's Product Disclosure Statement (PDS);
• did not, in ASIC's view, follow all elements of its compliance plan in respect of recording and responding to investors queries regarding those investments; and
• may not have exercised the level of care and diligence expected of a responsible entity, including in relation to ongoing investment review processes and external ESG input.

With respect to broader market disclosure and governance matters, ASIC has commenced proceedings against a suspended mineral exploration company and two of its directors in relation to the alleged non-disclosure of critical market information regarding the operation and ownership of a significant offshore asset.
ASIC's statement of claim alleges that the entity breached its continuous disclosure obligations and engaged in misleading and deceptive conduct by failing to announce an escalating legal dispute in relation to the offshore asset.

ASIC also alleges two of the entity's directors breached their directors' duties by:

• authorising or otherwise permitting the ASX announcements which were false or misleading; or
• omitting matters that rendered the ASX announcements false or misleading.

Enforcement notices

A super fund (Fund) has paid $18,780 to comply with an ASIC infringement notice, which alleged that the Fund made misleading statements about its investments. The statements were that manufacturers of tobacco products were excluded entirely from the Fund, however the Fund was found to indirectly invest in companies involved in tobacco manufacturing. The Fund no longer represents that it will entirely exclude investments in tobacco manufacturers.

Finally, H.E.S.T. Australia Ltd (HESTA) paid ASIC $37,560 to comply with two infringement notices for misleading statements, after it self-reported these issues. In 2024 HESTA had advertised that it had "committed to remove all investment in carbon emissions by 2050....". ASIC was concerned that this statement did not acknowledge the role of offsets in HESTA's target, given that its actual target was to achieve net zero carbon emissions across its investment portfolio by 2050.

Australia: Ad Standards dismisses complaints concerning alleged misleading and false environmental claims

The Ad Standards Panel (Panel) has recently dismissed two complaints.

The first complaint concerned statements on a cargo handling facility's website which the complainant suggested made false and misleading environmental claims. The Panel found that the statements did not constitute "advertising" as defined in the AANA Environmental Claims Code (AANA Code), considering their nature and presentation. The Panel concluded that the statements did not appear to be consumer-oriented nor part of any promotion of the company's product, brand or activities; instead, the content was presented in a manner consistent with corporate reporting.

The second complaint related to material published on the website of an oil and gas company. The Panel concluded that, except for several embedded YouTube videos, the website content was not an advertisement, as defined in the AANA Code. The Panel considered the written material could be distinguished from advertising as it was relatively hard to find and nothing suggested it was being promoted to draw the attention of the public, indicating it served primarily as corporate information.

By contrast, the YouTube videos appeared on a platform targeting a broad audience and contained promotional statements directed at the general public. Accordingly, the AANA Code applied to the YouTube videos. Nevertheless, the Panel ultimately decided that the four videos did not contain any environmental claims, as they did not assert that the project had a neutral or positive impact on the environment, is less harmful for the environment than alternatives, or has any specific environmental benefits.

For more information on the AANA Code, see our Insights article here.

Australia: Appeal lodged by Torres Strait Islander Elders over Federal Court's Climate Change Decision

In Pabai Pabai & Anor v Commonwealth of Australia, Uncle Pabai and Uncle Paul, Torres Strait Islander leaders, have appealed the Federal Court's July 2025 decision dismissing their climate case against the Australian Government.

The original judgment (see previous post here) found that the Commonwealth does not owe a legal duty of care to Torres Strait Islanders to set greenhouse gas emissions targets in line with the "best available science" or to protect their communities from climate change impacts. The Court held that such decisions are matters of "core government policy" and not suitable for judicial determination under Australian negligence law.

The appeal seeks to overturn this finding, arguing that the government's inaction threatens the Islanders' homes, culture, and human rights, and that the law should recognise a duty to protect vulnerable communities from climate harm.

International: French Court finds in favour of Greenpeace in Total Energies greenwashing case

In March 2022, three French non-governmental organisations, including Greenpeace France, initiated proceedings against TotalEnergies concerning 44 pieces of communication including advertisements, social media posts, and statements on the TotalEnergies website. These communications featured statements describing TotalEnergies as "a major actor in the transition", that gas is a "less emitting" source of energy with a "smaller carbon footprint than other fossil fuels", and assertions regarding the role of biofuels in reducing carbon emissions and decarbonising transport.

Recently, the Judicial Tribunal of Paris held that TotalEnergies had engaged in "misleading commercial practices" in breach of the Consumer Code in relation to the statements that TotalEnergies is "a major actor in the transition" and its "ambition of carbon neutrality by 2025." The Tribunal found these statements to be misleading because they failed to disclose that TotalEnergies planned to continue investing in oil and gas, which the Tribunal considered was inconsistent with the requirements of the Paris Agreement. The Tribunal stated that by making such statements, TotalEnergies led consumers to believe that in purchasing their services or products, the consumers were participating in the emergence of a low-carbon economy. As a result, the Tribunal ordered TotalEnergies to cease publishing the misleading statements and publish the Tribunal's decision on its website for 180 days.

The Tribunal declined to rule on whether TotalEnergies' own 2050 scenario was realistic. It also declined to rule on TotalEnergies' statements about biofuels and gas, stating that these were not related to the promotion, sale, or provision of energy to consumers.

International: Case brought against Shell by group affected by Typhoon Odette

On 23 October 2025, 67 individuals from the Philippines (the Claimants) whose homes were destroyed, or family members were killed by Typhoon Odette, sent a Letter Before Action (LBA) to Shell plc and The Shell Trading and Transport Company Limited (together, Shell). The LBA notifies Shell of intended legal proceedings in England and Wales, where Shell is domiciled. The proceedings will apply with law of the Philippines as this is where the damage complained of occurred. The four causes of action relied upon are:

1. Shell caused damage in a manner contrary to morals, good customs or public policy under the Philippines Civil Code;
2. Sell violated the Claimants' constitutional rights to a balanced and healthy environment;
3. Shell was negligent in failing to mitigate climate harm and by obfuscating climate science; and
4. Shell has been unjustly enriched by their contribution to anthropogenic climate change (ACC).

The Claimants intend to seek damages for losses including serious property damage, personal injury, bereavement, psychological trauma, loss of earnings, and loss of cultural rights. The claim relies on an independent report which indicated that ACC made Typhoon Odette significantly more likely and more severe. A central part of the claim is the allegation that Shell has known for decades that burning fossil fuels contributed to ACC but has engaged in deliberate deception and misinformation about the causes and impacts of climate change. The Claimants describe their claim as the first civil claim to directly link the climate impacts of oil and gas companies to death and personal injury that has already occurred in the Global South.

International: Exxon files claim to challenge California's climate disclosure laws and appeals court grants injunction requested by US Chamber of Commerce

ExxonMobil has filed a lawsuit in a US district court challenging new laws SB 253 and SB 261, known collectively as the California Climate Accountability Package. SB 253 requires companies with revenues greater than $1 billion that do business in California to report annually on their direct Scope 1 and 2 emissions, and Scope 3 value chain emissions, including those associated with supply chains, business travel, employee commuting, procurement, waste, and water usage. SB 261 requires that U.S. companies that do business in California and with revenues greater than $500 million to prepare a report disclosing their climate-related financial risk, as well as measures taken to reduce and adapt to that risk.

ExxonMobil is asking the court to declare that these laws violate First Amendment free speech rights – claiming that their main goal is to "embarrass" large companies and compel speech in support of the state's "ideological goals". Further, ExxonMobil alleges that the laws would force it to "serve as a mouthpiece for ideas with which it disagrees".

Separately, the US Chamber of Commerce has been working to have the courts strike down the Climate Accountability Package on similar constitutional grounds.

On 18 November, the Ninth Circuit decided to pause the application of SB 261 pending appeal, but declined to do the same for SB 253. The Chamber of Commerce has said that it intends to continue its appeal and secure an injunction against both SB 261 and SB 5253. Prior to the injunction by the Ninth Circuit, the first climate-related risk reports were set to be published by January 1, 2026.

Round up of ESG Shareholder activism at AGMs

Compared to the past two years, the 2025 annual general meeting (AGM) season saw continued uptick in protest votes against remuneration and, in some cases, individual directors. It also saw continued shareholder activism related to climate and nature matters, including a growing number of shareholder-requisitioned resolutions

The relatively new activist group, Sustainable Investment Exchange (SIX), continued to cement itself on the Australian shareholder landscape by requisitioning a range of resolutions related to climate and nature at Australia's main banks and supermarkets. However, other groups were similarly active as well.

In the financial services sector, thee of the four big banks received shareholder requisitioned resolutions regarding deforestation exposures related to their provision of finance to the agriculture sector and/or Customer Transition Plans and climate commitments.

The two main supermarket chains in Australia received requisitioned resolutions regarding the nature-related impacts of farmed seafood and their seafood sourcing policies, with Woolworths receiving a double (triple?) 'dose' of requisitions with additional resolutions received on the classification of beef as a 'high risk' deforestation-linked commodity and also in relation to its pulp, paper and timber policy.

As with past years, the substantive resolutions requisitioned were unsuccessful given the inability of the requisitioning groups to meet thresholds for amending the relevant companies' constitutions.

Activist activity was not confined to the business of the meetings, with protestor groups attending outside (and occasionally inside) a number of AGMs this season as well. Most interesting was Greenpeace at Telstra's AGM on 14 October 2025, with Greenpeace staging a protest outside the venue with a mock Telstra phone booth to 'call' the company to 'walk away' from the Business Council of Australia (BCA). Greenpeace also attended the AGM to question Telstra on its CEO's position on the Board of the BCA and the BCA's advocacy for further gas expansion.

COP30 Round Up

COP30 was billed as the "adaptation and implementation COP" and, despite some scrambling to negotiate and delays, delivered some multilateral achievements in an effort to keep the Paris Agreement process on track. While controversy over fossil fuels dominated the headlines, parties did make progress on finance and adaptation, and seeded a number of initiatives that will likely shape the agenda of COP31 and beyond. Some key outcomes included:

• Adaptation finance tripling by 2035: finance for climate adaptation is to at least triple by 2035, urging developed countries to increase the trajectory of the provision of climate finance for adaptation to developing countries;
• Launch of a Global Implementation Accelerator: a commitment to launch a Global Implementation Accelerator as a voluntary initiative to keep the Paris Agreement target within reach, by minimising the gap between the Nationally Developed Contributions (NDCs) and achieving the 1.5 °C target; and
• Adoption of Global Goal on Adaptation indicators: outside the headline decision, Parties endorsed a streamlined set of 59 voluntary indicators to measure progress on issues such as water security, resilient infrastructure and food-system adaptation.

Fossil fuel phase out

Perhaps the most contentious issue at COP30 was the language around coal, oil and gas, and ultimately the lack of consensus around phasing out fossil fuels. The final agreement did not commit to producing a roadmap away from fossil fuels, opting instead for wording that "invites efforts" to reduce unabated fossil fuel use. However, Brazil has pledged to table drafts of separate roadmaps on fossil-fuel transition and deforestation at the mid-year interim COP meeting, taking place 6 months from COP30.

In response to the final agreement, a number of countries, including Australia, made a voluntary commitment to "work collectively towards a just, orderly and equitable transition away from fossil fuels" as part of the Belém Declaration on the Transition Away from Fossil Fuels. This is one of the strongest statements Australia has made on phasing out fossil fuels, including gas. Although renewable energy has been on a path of significant development for a number of years in Australia, this has been seen alongside several approvals of new gas field developments and high levels of coal and gas exports. Prime Minister Anthony Albanese has continued the Government's messaging on natural gas including that natural gas will be required to firm renewable energy capacity beyond 2050, and that gas exports will not be tapered off.

Turning to COP31

Attention is already shifting to COP31, which will take place in Türkiye with Australia presiding over the negotiations. Holding this responsibility is likely to see increased focus both by and on the Australian Government to implement its domestic initiatives and commitments. Businesses could anticipate higher expectations in the run-up to COP31 and should consider their own robust, measurable adaptation and mitigation strategies now to ensure they are well placed for potential coming policy and market shifts.

Round Up: Key Workplace Law and Safety Updates

As 2025 draws to a close, several significant recent developments have shaped the employment, industrial relations and safety landscape. Here's what you need to know:

New psychosocial health regulations in Victoria

Victoria has introduced the long-awaited Occupational Health and Safety (Psychological Health) Regulations 2025 (Regulations). The Regulations, which commence on 1 December 2025, require employers to identify and control psychosocial hazards and are supported by a Compliance Code (Code). Importantly, the Regulations differ from the draft version in that they don't require employers to develop comprehensive written prevention plans, which they would have had to provide to WorkSafe Victoria inspectors or health and safety representatives on request. Despite this, the Code strongly encourages businesses to implement these plans, especially for risks relating to bullying, harassment and aggression. The Regulations align with the psychosocial risk regulations made in all of Australia's other jurisdictions and reinforces the duty of employers to ensure that psychosocial hazards are managed appropriately to ensure a healthy and safe working environment.

The introduction of these Regulations signals a renewed commitment to improving mental health outcomes in Victorian workplaces through legislative reform. Employers will need to understand the proposed changes in Victoria and plan how to implement them in their business to ensure compliance. Employers should familiarise themselves with the Compliance Code to understand how they can meet their obligations in this area.

Victoria introduces Act to restrict the use of NDAs to silence victims of work-related sexual harassment

The Restricting Non-disclosure Agreements (Sexual Harassment at Work) Act 2025 has recently passed Parliament and will take effect on 1 November 2026. Under the Act, NDAs in workplace sexual harassment cases are limited to confidentiality and non-disparagement clauses relating only to material information, such as the respondent's identity and details of the conduct. Confidentiality over settlement sums and general settlement terms remains permitted.

Importantly, NDAs are enforceable only if the complainant expressly requests them without undue influence. Any NDA or contract clause that prevents disclosure of material information is unenforceable; however, the Act does not impose penalties for non-compliance.

Women's workplace safety has declined over the last decade

While gender equality in the workplace has generally improved, significant disparities remain, particularly in safety and wellbeing. Women continue to experience much higher rates of workplace sexual harassment and psychological injury compared to men.

The University of Sydney's Gender Equality @ Work Index tracks progress across seven key dimensions. Each measure compares outcomes for women and men and is expressed as either a parity ratio or a dissimilarity measure, showing how close the two groups are to achieving equality. Notably, safety was the only dimension to decline since the previous report in 2014. The report also refers to findings from the Australian Human Rights Commission, which reveal that more than 40% of women, compared to 26% of men, have experienced workplace sexual harassment in the past five years. This is despite the 2022 amendments to the Sex Discrimination Act 1984, which introduced a positive duty requiring employers to proactively prevent sexual harassment.

These findings highlight the urgent need for employers to go beyond compliance and actively foster safe, inclusive workplaces through robust prevention strategies, regular training and a culture that prioritises wellbeing and accountability.

SafeWork Australia has updated its WHS Code of Practice on managing fatigue in the workplace

For the first time in over a decade, SafeWork Australia has revised its Code of Practice on Managing Workplace Fatigue. The updated guidance makes it clear that employers have a responsibility not only to prevent workplace fatigue but also to manage the risks it creates.

The revision was partly driven by research from La Trobe University, which found that most workplace interventions fail to address the complex, multifactorial nature of fatigue. Contributing hazards include:

• Long or irregular working hours
• Shifts that disrupt circadian rhythms
• Insufficient breaks during or between shifts
• High or low physical or cognitive demands
• High emotional demands
• Language or power imbalances
• Poor physical environments, such as extreme temperatures, noise or inadequate lighting

This update highlights the need for a holistic approach to fatigue management, one that considers both organisational practices and individual wellbeing.

WGEA Report – 2025 Gender Insights

The Workplace Gender Quality Agency (WGEA) has released its 2025 Gender Equity Insights report (Report). The Report provides an overview of the progress of workforce gender equity in Australia, with the key findings as follows:

• Workforce balance: Just 27.3% of organisations are gender balanced (40:40:20). Service industries are leading, while construction, mining and manufacturing remain heavily male-dominated.
• Leadership divide: Boards are nearing parity, but CEO and executive shares have plateaued at around 25%. Only a quarter of organisations have balanced leadership teams.
• Pathway under pressure: Female appointment rates are higher in some industries, but resignation rates for women in health, retail and agriculture are eroding gains.
• Pay gaps: Many occupations now show gaps within 5%, but structural segregation across industries and roles remain the major driver of inequality.
• Business performance: Firms with gender-balanced leadership achieve stronger market value and profitability, underling the economic as well as social case for equity.

These findings reflect that, whilst good progress is being made towards gender equity, there is still work to do. Notably, the Report highlights that recruitment alone cannot achieve gender balance. Rather, employers must address female attrition through flexible work practices, better promotion pathways, and inclusive leadership development.

FWC hands down its decision on the first "just transition" case

The Fair Work Commission handed down its decision in the first case concerning a "just transition" for workers affected by the shift to a net zero economy. Deputy President Saunders granted the determination sought by the Net Zero Economy Authority (NZEA) on behalf of AGL Torrens Island B gas workers, requiring AGL to meet its obligations under the NZEA and implement a range of measures to support transitioning employees. AGL did not oppose the NZEA's application.

This decision signals that employers in sectors impacted by decarbonisation should proactively plan for workforce transitions, such as identifying roles most at risk, developing retraining and redeployment strategies early and engaging with employees and unions to ensure tailored support and compliance with emerging obligations.

EU parliament approves a Provisional Agreement on the Omnibus I Directive

On 9 December 2025, the Council of the European Union and European Parliament reached a provisional agreement on the Omnibus I Directive to simplify sustainability reporting and due diligence requirements. On 16 December 2025, the European Parliament voted in favour of the provisional agreement, with the Council indicating that it will likely do the same. The agreement simplifies the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) by limiting the effects of obligations on smaller companies and decreasing regulatory burdens to boost EU competitiveness.

Key features of the provisional agreement include:

• changing the scope of the CSRD to remove listed SMEs, increase the employee threshold to 1000 employees, add a net turnover threshold of over €450 million, and exempt financial holding companies;
• increasing the threshold for the CSDDD's scope to 5,000 employees and €1.5 billion net turnover;
• exempting companies that started reporting for FY2024 ("wave one" companies) but will soon fall out of scope under the new thresholds;
• introducing a review clause concerning a possible extension of the scope for both the CSRD and CSDDD;
• removing the obligation for companies to adopt a transition plan for climate change mitigation under the CSDDD, however, the requirement to report on whether a climate transition plan is in place under the CSRD remains;
• removing the EU harmonised liability regime so that civil liability remains governed by national law, and inserting a review clause on the need for such a regime;
• agreeing on the maximum penalty as 3% of the company's net worldwide turnover;
• requiring companies to follow a risk-based due diligence approach under the CSDDD by using only reasonably available information to focus on where actual and potential adverse impacts are most likely to occur; and
• postponing the CSDDD's transposition deadline by a further year to 26 July 2028 where companies must comply with the new measures by July 2029.

For more information on the provisional agreement, see our ESG Note here.

Victorian EPA publishes draft guidance for minimising pollution and waste in changing climate

The Victorian Environmental Protection Agency (EPA) has published draft guidance, currently open for consultation, designed to help businesses and local governments understand and manage pollution and waste risks that are heightened by physical climate hazards such as bushfires, floods, and extreme weather. The guidance is directed to medium to high-risk activities, regardless of whether an EPA permission is held for that activity.

The guidance is intended to support compliance with the General Environmental Duty and EPA will likely use this guidance (once finalised) to support investigations into pollution or waste incidents that may be attributable to a climate-related hazard, especially to assess whether risk management strategies were in place and followed to address the relevant climate-related hazards. If an incident occurs that could be linked to a climate risk identified in the guidance, the EPA will likely scrutinise the adequacy and implementation of the business's risk management procedures.

The guidance is prescriptive as to how compliance is to be demonstrated and businesses will be expected to incorporate risks stemming from climate hazards into their existing risk management frameworks, focusing on identifying, assessing, controlling, and regularly reviewing risks from pollution and waste in a changing climate. The guidance outlines a structured approach, namely: businesses should map out how climate hazards could impact their operations, assess the likelihood and consequences of pollution or waste incidents under different climate scenarios, implement appropriate controls and check the effectiveness of those controls as hazards and operations evolve over time. The level of assessment and control should be proportional to the risk posed by the business's activities and location.

Ultimately, businesses will need to be proactive in adapting their operations and infrastructure to minimise pollution and waste risks associated with climate hazards, to ensure compliance with the GED. Consultation on the draft guidance is open until 3 December 2025.

UNEP releases responsible financing and investment report

Recently, the United Nations Environment Programme (UNEP) has released a series of major reports underscoring the scale and urgency of the global responses required to address climate change and support a just energy transition. The 2025 editions of the UNEP Emissions Gap Report and Adaptation Gap Report both warn that the world remains off track to meet the Paris Agreement's goals, with emissions reductions and adaptation finance falling far short of what is needed to avoid severe climate impacts. These reports call for further emissions cuts, a dramatic uplift in adaptation funding, and a transformation of financial systems to support climate resilience and low-carbon development.

Against this backdrop, UNEP has also published a report focused on responsible financing and investment in the extraction and supply of minerals critical to the low-carbon energy transition. The report calls for urgent reforms to the financial, governance, and regulatory systems underpinning the extraction and supply of minerals critical to the low-carbon energy transition, such as lithium, cobalt, nickel, and rare earth elements.

A significant increase in the supply of critical minerals is key to achieving the low-carbon energy transition by 2050, and investments of up to US$450 billion are required to meet the demand for these minerals by 2030. With a booming demand for critical energy transition minerals, sustainable financing emerges as a key driver of responsible mining – helping companies attract capital, manage risks, and meet growing expectations from investors, regulators and customers.

The report acknowledges the cost and reporting burden of implementing sustainable practices. However, the majority of respondents to a survey of large-scale mining companies recognised that strong ESG performance can help attract investors and secure project finance.

Key recommendations from UNEP's report include:

• integrating ESG compliant mining into sustainable finance taxonomies – the Australian Sustainable Finance Taxonomy released in June 2025 includes taxonomy criteria for mining activities for certain key ores. Read more here;
• promoting resource efficiency and circular use of critical minerals – Australia and the United States have committed to investing in critical minerals recycling technology and coordinated management of critical minerals and rare earth scrap under the new United States–Australia Framework for Securing of Supply in the Mining and Processing of Critical Minerals and Rare Earths. Read more here; and
• improving transparency, accountability, and benefit-sharing to ensure the mining sector's growth supports sustainable development.

AUASB releases sustainability and assurance consultations

On 23 October, the Auditing and Assurance Standards Board (AUASB) released an exposure draft for Amendments to ASSA 5010 Timeline for Audits and Reviews of Information in Sustainability Reports. The exposure draft covers two possible changes to the phasing in of assurance for sustainability reports:

• clarifying that the directors' declaration in the sustainability report is required to be subject to audit or review in years 2 and 3 of an entity reporting; and
• specifying how the phasing in of assurance would apply if provisions of the Treasury Laws Amendments (Strengthening Financial Systems and Other Measures) Bill 2025 on voluntary sustainability reporting under the Act are enacted.

This consultation closed on 24 November 2025.

On 3 November, the AUASB released a second exposure draft for Amendments to ASSA 5000 General Requirements for Sustainability Assurance Engagements. The exposure draft proposes adding four illustrative Corporations Act assurance reports to ASSA 5000:

• year 1 – Review report of specified sustainability disclosures (compliance framework);
• year 1 – Audit and review report on specified sustainability disclosures (compliance framework);
• years 2 and 3 – Review report on a sustainability report (fair presentation framework); and
• year 4 – Audit report on a sustainability report (fair presentation framework).

This consultation closed on 3 December 2025.

New Zealand Government amends scope and liability provisions of climate reporting regime

The New Zealand Government has announced significant changes to its climate-related disclosure (CRD) regime due to concerns that they were too onerous, and have become a deterrent for potential listers on the NZX.

The changes follow a public consultation process earlier in 2025, and include:

• Raising the mandatory climate reporting threshold for listed issuers (debt or equity) from NZD$60 million to NZD$1 billion. This will reduce the number of reporting entities by about half, noting that entities could continue to report voluntarily.
• Removing managed investment schemes from the climate reporting regime entirely.
• Adjusting the director and company liability settings, in particular removing deemed liability for certain breaches for all reporting entities. Directors and companies will still be liable for misleading or deceptive conduct or false or misleading statements.
• Removing the requirement that reporting entitles must show the same level of evidence for climate disclosures as they do for financial disclosures. The government noted that this change was made on the basis that that climate reporting involves future-focused and uncertain information, while financial reporting draws on historical information.

The Government has confirmed that changes to the climate-related disclosure requirements will be introduced through the Financial Markets Conduct Amendment Bill in 2026.

Insights form the ASIC Whistleblower Questionnaire

On 4 December 2025, ASIC released Report 827, 'Insights from the ASIC Whistleblower Questionnaire: July 2024 to June 2025'. The report focuses on trends amongst Australian companies regarding whistleblower policies and programs. It identifies key areas for improvement and encourages companies to adopt recommended practical actions to foster a stronger speak-up culture when adjusted to each company's unique context.

ASIC sent out a questionnaire on whistleblowing, which received responses from 134 companies, spanning a range of company types, sizes and industries. Those companies received a total of 8,095 disclosures between 1 July 2024 to 30 June 2025.

ASIC considered that a significant percentage of companies had failed to adopt 'better practices', with 36% of companies not providing a dedicated whistleblower webpage, 25% of companies not providing regular whistleblowing training to staff, and 58% of companies not seeking feedback from their employees on their whistleblower program and/or speak-up culture in the past year.

Other findings of interest amongst the surveyed companies included:

• large differences in investigation timeframes and substantiation rates between companies, with the average investigation time being 49 days;
• that, on average, 24% of in scope disclosures that were investigated were ultimately substantiated; and
• around 69% of all disclosures being made using a dedicated whistleblower reporting webpage or hotline.

In the Report, ASIC encouraged companies to use the findings from the report to review and improve their whistleblower policies and practices as appropriate in light of their individual circumstances. ASIC also stated that it is considering repeating the questionnaire in future years to observe changes in practice and track progress over time.

The full findings can be found here.

New educational material on AASB S2: Anticipated financial effects

On 5 November 2025, the Australian Accounting Standards Board (AASB) published educational material on disclosing information about anticipated financial effects. This educational material addresses disclosures related to the anticipated financial impacts of climate-related risks and opportunities, responding to stakeholder feedback that practical guidance on applying the requirements in AASB S2 would support entities in meeting these obligations. The educational material mirrors the content of the International Financial Reporting Standards' educational material on the same topic, which we covered in the August edition.

See previous discussion in our Keeping up with ESG Blog: August edition.

For clients with a presence in the United Kingdom, South African Development Community or Asia, we also publish trackers of ESG publications and developments for these regions at ESG Notes.

ESG thought leadership

To read more of our ESG thought leadership, please see:

Our 2024 Unlocking ESG Investment in Australia Report

Latest recordings of Third Wheel Podcast Series: ESG in Australia

ESG Notes and Climate Change Notes

ESG, Sustainability and Responsible Business

Written with assistance of Elise Plunket, Charlotte Haling and Mayling Paton (Head Office Advisory Team), James Moloney and Benita Williams (Environment, Planning & Communities), Alexia Giannesini and Jessie Xiao (Disputes), Amity Clayfield, Georgie Bartley, and Joshua Cooley (Employment, Industrial Relations and Safety), Yuki Ho and Ellie Hearnes (Project Finance). 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.