When speaking to shareholders and investors, one recurring theme I find is the pressing need for genuine accountability in ESG. 

Setting ambitious financial targets is one thing, but measuring their environmental and social impact is another. The shift requires businesses to change how they plan, report and make decisions across all industry sectors. 

Earlier in 2024 a report from Herbert Smith Freehills was released that outlined how almost 3/4 of Australian companies have integrated ESG considerations into their investment and diligence processes but only 56% have human rights risk management systems and less than a quarter address broader social matters in their operations.

It is a gap that provides both a challenge and an opportunity when Australian businesses look to leverage insights from countries who have a more matured approach to ESG integration.

The complex new regulations that boards and management teams are trying to navigate also require a deeper understanding and implementation plan that they can embed into their company cultures, organisational designs and operating models.

The reality is that businesses can not only embrace evolving standards, but they need to respond, adapt and act on them to gain competitive advantage and clearer investment opportunities.

As the outcomes from COP29 and the GBF framework take hold, the time to lead and ensure nature and broader ESG accountability into commercial models is now.

This is beyond a mission statement full of fluff and is more about showcasing your impact as no longer optional but actually foundational to being a sustainable business. The GBF’s mandate to embed nature in economic decision-making isn’t just a suggestion, it’s about transformation.

Starting in 2025 companies will need to align their executive strategies and leadership programs with these principles. This is not about compliance for the sake of checking compliance boxes, it’s about business integrity.

CEOs who can demonstrate that economic decisions genuinely account for the environmental and social systems they impact will go beyond being seen as aspirational case studies, to becoming the new standard in doing business in 2025 and beyond.

It is critical to identify that this is not the responsibility of a sustainability committee or PR campaigns that showcase virtue signaling, but about measurable accountability your CFO needs to be fully across.

Embedding biodiversity into financial planning must be scrutinised in much the same way stakeholders and boards scrutinise a P&L.

Westpac IQ’s recent report on the November COP29 conference highlighted this shift showing the commitment as an operational imperative.

The United Nations Framework Convention on Climate Change (UNFCCC) established a duty to support climate resilience in developing countries and now the focus has been on also expanding this framework to include investing in, repairing and restoring the national environment as a key driver of sustainable economic frameworks.

The first Global Nature Positive Summit in Sydney highlighted the value of biodiversity for both community resilience but also for business sustainability and success. Several priorities were agreed on including:

• Halting and reversing biodiversity loss is not only essential for communities but also a smart strategy.
  
  
• Considering nature into economic and business decisions as foundational instead of optional.
  
  
• Maintaining critical clear and consistent metrics to measure progress toward collective nature positive goals.
  
  
• Net zero objectives and nature positive strategies must align for the business to ensure long term success.
  
  
• Indigenous leadership and perspectives are critical to addressing environmental challenges.

Setting budgets and targets like the $200 billion annual biodiversity goal is essential, but the true test lies in measuring and proving impacts, ultimately it comes down to accountability.

For Australian companies this means transforming high level commitments into strategies that can be embedded and measured across executive functions and operational systems.

Leaders need to be more thoughtful in how they approach these goals, as the GBF makes the point that it is not a one-off initiative but one of systemic change.

Those companies who focus on adopting integrity and value-driven models that see biodiversity as just part of their ‘business as usual’ norm and choose to actively align in 2025 with these evolving standards will gain competitive and investor advantages.

As COP29 outcomes and the GBF framework roll out, Australian organisations that lead in accountably embedding nature into their economic systems will set themselves apart as leaders in doing better business by being better businesses.

It’s time for business leaders to prove your impact and embed biodiversity into your business DNA. The sustainability of your business – and the world around you – depends on better planning, reporting and decisioning that embeds biodiversity into operating models – not as virtuous side projects. 

It’s easy to fall victim to the ‘cost of compliance’ narrative. It’s even easier to turn new biodiversity frameworks, standards and regulations into a commercial advantage – when you know how. The days of commercial excuses are over, the time for accountable action is now.