Australia is intensifying its commitment to ESG (environmental, social, and governance) policy with renewed momentum following the Labor Party’s re-election. Amid global regulatory flux—where the EU is simplifying ESG rules and the US sees a rollback of federal ESG ambitions—Australia’s evolving legal framework presents both challenges and strategic opportunities for businesses. 

The core ESG legal risks businesses must now navigate include domestic regulations, international compliance, ESG-driven litigation, and stakeholder pressure. Australia’s new climate-related financial disclosure regime is already in effect, and the Treasury’s sustainable finance roadmap is progressing. Additionally, paused reforms under the government’s “nature positive” plan are likely to resume, alongside fresh commitments on gender equality targets, modern slavery reform, and a potential federal Human Rights Act. 

At the global level, Australian firms face cascading obligations through supply chains linked to jurisdictions with stricter ESG standards, such as the EU, Canada, and the UK. These external pressures increase the need for clear carbon neutral strategies and transparent sustainability reporting, even for companies not directly operating in those regions. 

ESG litigation is also growing. Australian regulators are targeting greenwashing, First Nations rights, and climate-related claims. Meanwhile, investors, employees, and consumers are stepping up pressure on companies to deliver credible ESG performance and long-term sustainability. 

To manage these rising risks, experts recommend strengthening ESG governance. This includes embedding ESG into board oversight, understanding supply chain risks, adopting effective grievance mechanisms, and implementing strong data systems for ESG disclosures. 

As ESG regulatory expectations tighten, companies that develop rigorous compliance frameworks and integrate ESG into their corporate DNA will gain a competitive advantage. Australia’s trajectory underscores the critical role of ESG in business resilience, risk mitigation, and sustainable value creation. 

Source: 

https://www.corrs.com.au/insights/australias-evolving-esg-regulatory-landscape-managing-the-legal-risks