The concept of sustainable development is commonly defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
The United Nations Sustainable Development Goals outline how sustainable development everywhere must integrate economic growth, social well-being and environmental protection.
In this context, Environmental, Social and Governance (ESG) has become an integral part of government and business operations, with reporting on ESG performance now an expectation for many large organisations and an important aspect of doing business across the spectrum.
Beyond setting Net Zero targets, ESG is about improving social and environmental outcomes across a range of areas, and industry is increasingly expected to be open and transparent about its impact and role in addressing current and future challenges in this space.
ESG reporting is no longer new, however here in Western Australia, we are still developing our capabilities in this space, and learning from what is happening in other places internationally and around the country to grow our capability.
There is a huge appetite for innovation in WA and there are many people and organisations that are leading the movement toward more sustainable urban development.
With rising stakeholder expectations and economic pressures, prioritising sustainability that goes beyond regulatory environmental standards will help future-proof the development industry and ensure that we remain at the cutting edge of innovation.
ESG Reporting
If your organisation is exploring ESG reporting, there are three key areas that ESG reporting should cover:
- Environmental: includes information about greenhouse gas emissions, water usage, waste disposal, and biodiversity;
- Social: includes information about employee relations, human rights, community engagement, and product safety; and
- Governance: Addressing risk and opportunity, including information about the board of directors, executive compensation, and corporate ethics.
Climate reporting in Australia
While ESG is a growing focus for government and business, climate reporting in particular is now mandated in Australia for large businesses and financial institutions.
While the current Federal Government legislation targets big business, many organisations that aren’t captured under mandatory reporting are choosing to disclose, or exploring their options in the knowledge that expectations and requirements will continue to evolve in this space.
How reporting standards were established
The International Sustainability Standards Board (ISSB) published inaugural sustainability disclosure standards (IFRS S1 & IFRS S2) in June 2023. The Standards form a comprehensive global baseline of sustainability disclosures designed to meet the information needs of capital market stakeholders.
IFRS S1 is the general requirements for disclosure of sustainability related financial information.
It provides a set of disclosure requirements designed to enable companies to communicate to investors about the sustainability-related risks and opportunities they face over the short, medium and long term.
IFRS S2 sets out the climate related disclosure requirements for a company to disclose information about its climate-related risks and opportunities, while building on the requirements described in IFRS S1.
In Australia, the Australian Sustainability Reporting Standards (ASRS) set out the sustainability-related and climate-related financial disclosures for sustainability reports/ general purpose financial reports aligned with IFRS S1 and S2, with modifications to suit the Australian legislative and regulatory context.
Under ASRS, disclosure of sustainability related financial information is voluntary while climate related disclosures are mandatory for certain organisations.
Mandatory climate reporting began on 1 January 2025 for large Australian businesses and financial institutions, who now need to prepare annual sustainability reports containing mandatory climate-related financial disclosures.
Large scale property developers operating in Western Australia are subject to these requirements if they meet the size thresholds and are required to submit financial statements under the Corporations Act.
Entities required to report under the new standards are outlined here.
If an organisation does not meet the requirements for mandatory reporting, an organisation can still choose to voluntarily adopt the standards.
Life cycle assessment
To assist developers in assessing their carbon footprint across their project lifecycles and support corporate level reporting, UDIA WA has partnered with Cerclos, Cedar Woods, Hesperia, Peron Developments, Peet, DevelopmentWA and Emerge Associates to develop a standardised approach to Life Cycle Carbon Assessment for land development including the associated infrastructure works.
Cerclos is a global leader in providing life cycle assessment (LCA) software and expertise for the built environment. Their flagship software, eTool, is collaborative software for organisations to effectively measure, improve and report on the whole-life carbon emissions of their building projects.
How to find out more
ESG and climate reporting is a complex and evolving area. To that end, UDIA WA has established a Sustainability & ESG 101 virtual course as part of our wider UDIA WA Educate program.
The three, one hour sessions that form this introductory course provide participants with an understanding of what sustainability and ESG encompasses and how it is relevant for the urban development industry; how to develop and deliver sustainability strategies and initiatives; emerging reporting requirements and key considerations for organisations; and practical tools to assess, optimise and demonstrate project sustainability.
The course is aimed at industry practitioners, development and project managers, consultants, local government and state government representatives as well as professionals with an interest in this area or who are new to the WA development industry and keen to expand their local knowledge.
Presenters include local industry and sustainability experts Mark Taylor & Jo Wilson (Hesperia); Sam Sandhay (Cerclos); and David Beyer (Stockland).
To find out more about the course, and other UDIA WA Educate courses on offer relevant to the WA property industry, visit: https://www.udiawa.com.au/professional-development/
By Tanya Steinbeck
