building a green supply chain: how Australian companies are reducing their environmental impact
Reducing environmental impact has become a top priority for many industries, nationally and internationally. This is understandable, as globally nations are focused on reducing carbon footprints and building sustainable and eco-friendly economies.
Australian environmental policy is at the forefront of this change, helping organizations create effective change and move towards a sustainable future.
In this blog, we will cover Australia’s latest and most comprehensive legislation affecting the industry and reporting standards: the Australian Sustainability Reporting Standards (ASRS) and the National Greenhouse and Energy Reporting Standard (NGER). We will also dive into how Australian companies are reducing their environmental impact, both within their organizations and in their wider communities. Lastly, we’ll also cover an economic framework that is shifting how industries operate: circular economy.
Let’s get started.
what are the Australian Sustainability Reporting Standards (ASRS)?
Developed in response to the growing demand for purposeful sustainability practices, the Australian Sustainability Reporting Standards (ASRS) are a structured framework of environmental standards that companies follow to report their environmental, social, and governance (ESG) performance, regardless of company size or industry.
The ASRS came about as a mission to ensure consistency, reliability, and comparability in corporate sustainability reporting across all Australian organizations. The ASRS aligns with global reporting frameworks, such as the Task Force on Climate-related Financial Disclosures (TCFD), the Global Reporting Initiative (GRI), and the International Sustainability Standards Board (ISSB).
The ISSB’s sustainability disclosure standards have played a significant role in the development of the ASRS, providing a baseline for the reporting standards. Comparatively however, the ASRS is tailored to Australia’s unique environmental, social, and economic context.
The final iteration of the ASRS issued by the Australian Accounting Standards Board (AASB) are as follows:
- AASB S1: the General Requirements for Disclosure of Sustainability-related Financial Information is a voluntary standard which covers all sustainability-related financial disclosures. It aligns with the ISSB’s IFRS S1 ‘General Requirements for Disclosure of Sustainability-related Financial Information.’
- AASB S2: is the Climate-related Disclosures and is a mandatory standard that incorporates all necessary requirements in the IFRS S1, which allows it to function as a standalone, climate-only standard.
Regardless of how comprehensive the ASRS is, it is narrower in scope than the ISSB’s standards as some aspects of the ASRS are not mandatory.
what is the National Greenhouse and Energy Reporting Standard (NGER)
- Greenhouse gas emissions
- Energy production
- Energy consumption
what is a circular economy?
A circular economy is an economic system in which goods and materials that are used within the industry are not wasted but rather are circulated back into industry activities. Through this model, natural resources are continually regenerated, and ecosystems are protected.
In contrast to a linear economy, wherein most if not all of the materials used are one-and-done, and therefore continually sap the environment and natural resources, a circular economy circulates all materials and resources through processes of maintenance, resume, refurbishment, recycling, composting, and remanufacturing.
Ultimately, a circular economic framework eliminates the consumption of finite resources within a throwaway economy.
According to the Ellen MacArthur Foundation, a circular economy is based on three principles:
- Circulation of product and materials at their highest value, thus eliminating waste
- Regeneration of ecosystems and resources
- Elimination of waste and pollution
Most recently, the Australian government has unveiled the Australia’s Circular Economy Framework, which is designed to guide Australia’s economy from a linear model to a circular one.
The goals set out in the framework are to double Australia’s circularity by 2035 – an ambitious but hopeful goal. Additionally, it also targets:
- A 10 percent reduction in per-capital material footprint
- A 30 percent increase in material productivity
- An 80 percent resource recovery rate
The Australian Circular Economy Framework outlines benefits for Australian industries, including:
- Clear guidance
- Real-world examples on how companies can cut emissions and waste
- Other priorities
- Clear vision and actionable pathways
- Alignment of regulations, planning and program funding within the circular economy goals framework
Ultimately, the framework sets out guidelines to help improve the Australian economy and manufacturing by ensuring all goals are achievable and cost-effective for everyone.
how are Australian companies reducing their environmental impact?
embracing remote work
Over the COVID-19 pandemic, nearly all industries either shut down completely, or transitioned to remote work. While this created a huge challenge for a lot of businesses and their employees, collectively we have learned to adapt. And many companies have kept this philosophy, for a number of reasons, including Australian organizations.
Remote work significantly cuts down on carbon emissions that are associated with worker commutes. In fact, many companies have found that continually allowing their employees to work remotely not only cuts down on their carbon footprint, but fosters more productivity, inclusivity, and accessibility, particularly for employees with disability needs. This has created a corporate culture of diversity and inclusivity.
In addition, this shift to remote work has also encouraged embracing digital operations, which minimize the need for overhead and physical materials. This reduces waste and energy consumption associated with production.
Cloud-based systems, virtual meetings and in-person events have not only reduced the impact that industry had on the environment but has allowed for more innovation in alternative modes of work.
adopting a climate-first philosophy
Moving towards an eco-friendly economy, including industry and manufacturing, requires a shift in mindset, which Australian companies are adopting.
From the outset, Australian companies are articulating their environmental, social, and governance (ESG) visions, building long-term goals and core values with the intention of reducing (or eliminating) carbon footprints and becoming caretakers of their communities.
This has become inculcated throughout all tiers of organizations. Most importantly, a climate-first philosophy has been adopted by corporate and company leadership, who are playing key roles by consistently communicating this vision across all departments, and even in consultation with public and policy makers in a concerted effort to create partnerships that can move towards a more sustainable future.
adopting green supply chain initiatives
Green supply chain initiatives are those that focus on carbon reduction or elimination in the process of procuring, manufacturing, and distributing materials. This is about choosing suppliers and logistics companies that prioritize environmental sustainability, which ultimately leads to more adoption of green supply chain initiatives.
What does this look like? Choosing local suppliers, as an example, has had many positive impacts on Australian industry, local economies, and communities. Companies have also chosen to adopt eco-friendly packaging and shipping methods, in collaboration with developing green procurement policies that continue to inculcate green-friendly practices into organizations.
Through the integration of these initiatives, Australian businesses not only have reduced their own carbon footprints but have influenced partners and suppliers to do the same.
adopting sustainable resource management
Sustainable resource management requires complete evaluation and adjustment of all materials and processes used in company operations. Through this strategy, companies prioritize environmental sustainability, diversity, and inclusion in their practices.
Australian companies have met this challenge with various regulations and policies that require transparency, accountability, and action planning. In particular, adopting a circular economy model has helped many Australian companies pivot to more sustainable operations. Ultimately, this boosts the Australian economy as many companies are seeking local partners first.
optimizing use of technological innovations including ESG SaaS
Australian companies who are succeeding in reducing their environmental impact have one thing in common: they make use of technological innovations, including ESG SaaS.
what is ESG SaaS?
SaaS is an acronym for software-as-a-service. It’s a special type of software that uses cloud commuting to organize, store, secure, and create efficient and effective workflows for everyone. It uses a cloud delivery model provided by a host who provides storage, security, databases, networks, and computing resources.
This type of software removes the need for individual organizations to shoulder the burden of overhead costs, investments, and labor that would otherwise be required to host their own software. It also allows companies to shift and grow without any additional burden on the organization as SaaS providers work on a flexible, as-needed model.
Whether you or your team are aware or not, you are using SaaS every day. For example, Salesforce is one of the top SaaS companies in the world. Some other SaaS applications include Google Workspace, HubSpot, and Zoom.
ESG SaaS is a specific type of sustainability management SaaS software that focuses on ESG reporting so companies can manage the data collection, storage, and organization of their ESG activities. ESG SaaS software helps companies streamline all ESG data collection, creating actionable reports.
why are Australian companies adopting ESG SaaS?
Given the rapid growth of both national and international ESG reporting policies, companies have adopted technologies that help them gather and manage their ESG data. There are a number of benefits that Australian companies have gained with ESG SaaS software, but the ones that rise to the top are:
- Preparation of emissions calculations: The process of compiling and calculating annual carbon emissions (Scopes 1, 2, and 3) is a labor-intensive and daunting process. With the right ESG SaaS solution, Australian companies have streamlined their data collection processes, while also having the freedom to update calculations on a regular basis.
- Quantification of diversity, equity and inclusion data: As part of reducing environmental impact, Australian companies have focused also on diversity, equity and inclusion (DEI). In fact, many rules and regulations regarding ESG data also require DEI data to be made available. With ESG SaaS software, Australian companies have been able to harness the power of their data to create more inclusive, eco-friendly workplaces.
- Philanthropy data management: In recent years, the Australian industry has put considerable focus on philanthropy and cultivating healthier communities. ESG SaaS software has played an instrumental role in helping Australian companies lead the charge in building healthier communities through philanthropic endeavors.
To read more about ESG SaaS and how it can help your organization, head over here.
paving the way to a greener future with the right solutions
Australian companies have been early adopters of reducing their environmental impact. As the hard work continues, so do Australian companies continue to pave the way towards a greener future with the right solutions.
Harnessing the power of your ESG data is easier than you think and will help set your organization on the right path towards reducing environmental impact. That solution is with a partner like AMCS.
To find out more about how you can help pave the way to a greener, and more sustainable and prosperous future through your ESG reporting, speak to an AMCS expert today.