Companies in Australia are accelerating investments in technology to enhance their environmental and sustainability efforts, a new report by Information Services Group (ISG) has found.
According to the 2024 ISG Provider Lens Sustainability and ESG report for Australia, new legislation enacted by the country’s government since 2022 has helped to bolster corporate action on sustainability.
This includes a requirement for companies to disclose climate-related risks, as well as incentives for those investing in renewable energy.
Climate change
In terms of the areas that Australian firms are most focused on when it comes to ESG, climate change tops the list, driven by extreme weather events and investor awareness of the potential costs of climate risks, ISG noted.
“Australian companies have a growing appreciation for the opportunity to cut costs, emissions and waste through sustainability initiatives,” said Michael Gale, partner and regional leader, ISG Asia Pacific. “Compliance is a major concern, but most want to become more sustainable anyway if they can do so profitably.”
Sustainability transformation
While Australian firms are upping their investment in technology, particularly AI solutions, they lag behind their European peers in terms of recognising the full benefits of sustainability transformations, according to the report.
‘Enterprises have seen their provider options growing in recent years as local and global competitors enter the market with technology solutions’, the report said. ‘However, ISG has recently seen providers consolidating and recalibrating their portfolios to serve the use cases with the highest potential. Australian organisations prefer partners with significant experience in the sustainability requirements of their industry, and some are using more in-house resources to reduce their consulting budgets.’
The report also explores other trends affecting ESG initiatives in Australia, including the development of enterprise plans for reconciliation with First Nations people and the ongoing debate about how to regulate AI.
“Progressive companies in Australia have started to change their operating models as they adapt their organisations to incorporate sustainability,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Digital tools are essential but only part of the solution.” Read more here.
