SESG

06/02/2026

The Equator Principles are central to managing environmental and social risk in project finance.

As lenders and investors continue to apply the Equator Principles, robust environmental and social risk management is no longer optional, it’s fundamental to project bankability, resilience, and long-term performance.

In our latest blog, we explore what the Equator Principles are and why they matter.

👉 Read the blog: https://sesg.co/managing-environmental-and-social-risk-in-project-finance/

27/01/2026

Climate scenarios are not predictions.
They are structured, evidence-based narratives that explore plausible future pathways based on different assumptions about policy action, technology, emissions, and physical climate change.

We use scenarios to help organisations ask better questions, such as:
• What happens to our business under a rapid transition to net zero?
• What risks emerge if global action is delayed or disorderly?
• How do physical climate hazards intensify under higher-warming futures?

Selecting the right mix of scenarios matters because each one reveals different risks and opportunities. Together, they help organisations test resilience, challenge assumptions, and understand uncertainty, rather than relying on a single “most likely” future.

For climate disclosures (including under AASB S2), scenario analysis supports:
✔ Identifying material climate risks and opportunities
✔ Assessing impacts across short, medium and long time horizons
✔ Informing strategy, adaptation, and transition planning
✔ Connecting climate risks to financial implications

At its core, scenario analysis isn’t about getting the future “right” — it’s about being prepared for more than one future.

20/01/2026

ASIC will be actively reviewing sustainability and climate disclosures in 2026, and its expectations have been made clear.

As the regulator responsible for administering sustainability reporting under the Corporations Act, Australian Securities and Investments Commission (ASIC) will commence its first formal review of sustainability reports lodged in the first year of reporting for the Australian Sustainability Reporting Standards AASB S1 and AASB S2.

ASIC’s focus is on high-quality, consistent and comparable disclosures, and it has clear powers where statements are considered incorrect, incomplete or misleading, including directing entities to explain, substantiate, correct or republish disclosures.

For organisations preparing AASB S1 and S2 disclosures, this reinforces a critical message:

Climate and sustainability reporting must be treated with the same rigour as financial reporting.

Strong governance, defensible assumptions, robust data, and clear documentation are no longer optional.

https://sesg.co/asics-2026-enforcement-focus-climate-disclosures/

19/01/2026

As we look ahead to 2026, our focus at SESG is clear.

Climate disclosures will remain front and centre — supporting current Group 1 reporters while helping the next wave prepare early and well.

While climate-related disclosures rightly remains in sharp focus, we believe we will see continued demand for holistic sustainability. From robust governance, social responsibility and environmental stewardship. Stakeholders still care deeply about doing sustainability well.

continues to go from strength to strength, supporting consistent, credible and decision-useful sustainability data.

Above all, our team’s wellbeing and happiness remains a top priority as we continue to work together, guided by our values of , , and .

And yes — there’s big news coming in March… more to come soon.

We’re excited for what’s ahead.
— Jackie & Dan
Directors

,

14/01/2026

Materiality isn’t one-dimensional, and neither are today’s sustainability reporting frameworks.

Frameworks such as ISSB / AASB, GRI, and ESRS increasingly require organisations to be clear about why a topic is material, and from which perspective.

This is where double materiality comes in.

Financial materiality asks:
Does this topic affect (or have the potential to affect) the organisation’s enterprise value, financial position, or future performance?

Impact materiality asks:
Does the organisation’s activity have a significant impact on the economy, society, or the environment across its value chain?

Double materiality recognises that both can be true at the same time, and that transparency improves when organisations consider both dimensions.

Understanding this distinction is critical for:
• Designing robust materiality assessments
• Aligning disclosures to the right frameworks
• Explaining why certain topics are prioritised
• Strengthening credibility with regulators, investors, and stakeholders

At SESG, we help organisations navigate materiality in a way that is practical, defensible, and fit for purpose, ensuring reporting aligns with both regulatory expectations and real-world impacts.

13/01/2026

AASB S2 is where climate disclosure meets audit reality.

One of the most significant shifts under AASB S2 isn’t just the requirement to disclose climate-related risks and opportunities, it’s the expectation that those disclosures are clearly connected to the financial statements and capable of standing up to audit scrutiny.

Auditors are no longer looking at climate disclosures as a parallel narrative.

They are testing whether:
- The climate risks discussed in the sustainability statement are reflected in the numbers and assumptions used in the financial statements.
- The results of scenario analysis are either built into financial decisions, or clearly explained if they are not.
- Governance, controls, and data processes supporting climate information are robust, repeatable, and documented.

What we’re seeing in practice is that the challenge isn’t just identifying climate risk, it’s demonstrating connectivity. Where a sustainability statement describes material climate impacts, auditors will expect to see evidence of how those impacts have been considered in:
- Financial planning
- Budgets
- Forecasts

Under AASB S2, inconsistencies between climate disclosures and the financial statements are likely to be challenged. Statements such as “no material financial impact identified” now require a defensible explanation, aligned assumptions, and a clear audit trail.

For organisations in the first wave of disclosures, AASB S2 is setting a new bar: climate information must be decision-useful, internally consistent, and audit-ready. Achieving this requires early and ongoing collaboration between sustainability, finance, risk, and audit teams.

Climate risk is business risk, and auditors are treating it that way.

07/01/2026

Internal carbon pricing (ICP) is no longer just a sustainability tool, it’s fast becoming a governance and financial risk tool.

At its core, ICP is about assigning a notional price to greenhouse gas emissions to inform decisions.

Why does this matter under the Australian Sustainability Reporting Standards AASB S2?

Internal carbon pricing is one of the clearest practical bridges between climate risk analysis and financial decision-making. It moves climate from a disclosure exercise to a business lens:

- It changes conversations in the boardroom
- It improves comparability across options
- And it strengthens the link between sustainability teams and finance

As climate reporting shifts from “what do we emit?” to “how does climate affect value?”, tools like ICP become essential.

15/12/2025

When assessing human rights risks, one concept keeps coming up: salience.
But what does it actually mean?

In human rights, salience isn’t about what risks matter most to the business, it’s about what risks pose the greatest potential harm to people.

It shifts the focus from:
“What hurts our organisation the most?”
to
“Where could people experience the most severe impact?”

Salient human rights risks are those that could cause:

- Serious harm (e.g., forced labour, child labour, unsafe working conditions)
- Widespread harm (affecting many people)
- Irreversible harm (long-term or permanent impacts)

This approach pushes companies to look beyond financial or reputational exposure and instead prioritise the rights and wellbeing of workers, communities, and vulnerable groups.

Why does this matter?
Because modern slavery, ESG reporting, and the UN Guiding Principles all expect businesses to focus on people-centred risk, not business-centred risk.

Getting salience right is a critical step in building meaningful due diligence, ethical supply chains, and credible sustainability reporting.

10/12/2025

Scenario analysis isn’t just about understanding climate risk, it’s about translating those insights into financial implications that matter for disclosure and decision-making.

Under AASB S2, organisations must assess how climate-related risks and opportunities could impact their financial position, performance, and cash flows across different time horizons and climate futures.

This means going beyond identifying hazards.
It requires considering:
• Potential impacts on operating costs, productivity, and insurance
• Effects on asset values, asset lives, and capital investment
• Supply chain disruptions or increased procurement costs
• Revenue implications from market or policy shifts
• Adaptation, mitigation, and resilience expenditures

In other words, scenario analysis becomes more meaningful when it is connected to financial outcomes.

At SESG, we help organisations bridge this gap by:
✔ Turning scenario outputs into quantifiable financial considerations
✔ Identifying which impacts are material and should be disclosed
✔ Aligning disclosures with AASB S2 requirements
✔ Building clear, decision-useful climate statements integrated into broader ESG strategy

Climate risk is financial risk, and AASB S2 makes this link explicit.

Supporting your organisation to understand and communicate that link is where we come in.

10/12/2025

Sustainability isn’t just about the big initiatives.

It’s also about the small, consistent actions we take every day, the ones that turn good intentions into measurable impact.

One of the easiest places to start? Office waste management.

By applying the waste hierarchy (avoid, reduce, reuse, recycle, recover, dispose) organisations can make tangible progress in waste management, resource efficiency and emissions reduction.

We've outlined some practical steps to get you started:
✅Conduct a waste audit to identify waste streams and key opportunities for reduction
✅Provide clear segregation solutions, bins, signage, and staff awareness are key
✅Weigh your waste to establish baselines and monitor performance
✅Consider procurement choices, selecting sustainable, low-waste, and circular options

At SESG, we help organisations go further, from conducting waste audits and establishing IMS processes and procedures for waste management, to developing waste monitoring programs that turn data into action.

Because real sustainability isn’t just about the big projects, it’s built through the everyday choices we make.

09/12/2025

Australia is moving ahead with the most significant overhaul of its federal environmental laws in more than 20 years, and the changes will reshape how organisations plan, assess, and deliver projects.

Key shifts include:

⚬ National Environmental Standards
⚬ A new independent regulator (NEPA)
⚬ Stronger compliance and higher penalties
⚬ Mandatory climate disclosures for EPBC-triggered actions
⚬ Net-gain environmental outcomes and updated offset requirements
⚬ Bioregional planning for clearer “go / no-go” development zones

These reforms bring higher expectations but also far greater clarity and consistency for proponents. For many organisations, the time to prepare is now, from strengthening governance and impact assessment to understanding how new standards may apply across operations.

SESG is supporting clients across sectors to navigate these changes with practical guidance, gap analyses, scenario planning and training.

🔗 Read our latest blog to learn more.
https://sesg.co/navigating-australias-new-environmental-laws/

Australia’s New Environmental Laws: A practical overview of the Federal environmental law reforms and what organisations should do now to prepare for new standards & compliance expectations.

09/12/2025

Ever wondered what the UN Guiding Principles on Business and Human Rights (UNGPs) actually mean for organisations?

In simple terms, they’re the global rulebook for how businesses should respect people, across their workforce, suppliers, and communities.

They come down to three big ideas:
1. Governments must protect people.
Set the laws, enforce them, keep people safe.

2. Businesses must respect human rights.
Don’t cause harm.
Don’t ignore risks in your supply chain.
Take action when issues arise.

3.People must have access to remedy.
If something goes wrong, there must be a clear way to raise concerns and get it fixed.

The UNGPs are the foundation of modern slavery laws, ESG standards, and investor expectations worldwide.

If you’re working in sustainability, procurement, risk, or governance, they’re essential knowledge.