Navigating the ESG Shift > FIVE Priorities for Australian CFOs in 2025

The role of the Chief Financial Officer is evolving rapidly. Historically focused on managing finances, today’s CFOs must lead on Environmental, Social, and Governance (ESG) issues or risk leaving their organisations behind. Growing pressure from investors, regulators, and the public has made ESG a central concern for Australian businesses.

Investors are demanding clearer ESG disclosures to understand long-term risks associated with climate change and sustainability. Companies that fail to meet these expectations could struggle to attract capital or face higher borrowing costs. Regulators are introducing stricter reporting standards, such as the Australian Sustainability Reporting Standards (ASRS), which require businesses to provide detailed emissions and climate risk disclosures. Meanwhile, the public is becoming more conscious of corporate responsibility, with consumers and employees favouring businesses that demonstrate genuine commitments to sustainability.

To navigate these challenges, here are FIVE key priorities for Australian CFOs in 2025.

1. Understanding ASRS compliance before it’s too late

Sustainability reporting is no longer optional; it’s essential. The ASRS will soon require companies to disclose their direct and indirect emissions. Without robust tracking systems, businesses will struggle to meet these requirements.

Rather than viewing compliance as a burden, CFOs should see it as an opportunity to build trust. Collaborating with legal and finance teams early will help avoid last-minute stress. Investing in reliable ESG tracking tools will simplify compliance and improve transparency.

Listed companies will soon need to disclose Scope 1 and Scope 2 emissions, with Scope 3 emissions following shortly. CFOs must ensure their organisations have robust tracking systems in place now to avoid scrambling later.

2. Managing ESG data properly

Reliable ESG data is the backbone of informed decision-making. CFOs need a system that tracks key sustainability measures and integrates them with financial reports.

BHP, a leading mining company, has already integrated ESG data into their financial planning. In FY2024, BHP reported a 32% reduction in operational greenhouse gas (GHG) emissions, aligning its sustainability efforts with business performance goals. By focusing on Scope 1 and Scope 2 emissions (direct emissions from operations and indirect emissions from purchased energy), BHP ensures its financial decisions reflect long-term sustainability commitments.

As stricter reporting rules and investor expectations loom, companies that follow suit will be better positioned to meet these challenges.

3. Making non-financial data audit-ready

Non-financial data is now under as much scrutiny as financial records. Regulators like the Australian Prudential Regulation Authority (APRA) are ramping up oversight, making it essential for CFOs to ensure their ESG reports are accurate and audit-ready.

This means collaborating with auditors early to address gaps in reporting. Strong internal checks and controls will help businesses avoid compliance issues and improve transparency.

For example, CFOs in sectors such as banking and insurance must ensure their climate risk reporting meets the same level of scrutiny as their financial statements. APRA is already closely monitoring disclosures, so early preparation is crucial.

4. Keeping up with global ESG standards

ESG isn’t just a local issue; it’s global. Companies that don’t align with international standards like the ISSB, TCFD, and GRI risk losing credibility with investors and business partners.

Woolworths, for example, has aligned its sustainability reporting with global standards like the Task Force on Climate-related Financial Disclosures (TCFD). The company incorporates TCFD recommendations to assess and disclose climate-related risks and opportunities. Woolworths continues to monitor and adjust its strategies to meet the evolving demands of global ESG regulations. Aligning with international standards helps businesses stay competitive and avoid playing catch-up.

5. Moving away from spreadsheets and embracing technology

If your company still tracks ESG data in spreadsheets, it’s time for an upgrade. Manual reporting leads to errors and inefficiencies. CFOs should explore automated ESG platforms that streamline data collection and analysis.

Fortescue Metals Group is already leveraging AI to monitor emissions and improve energy efficiency. The company uses AI to optimise the performance of its green fleet, reducing reliance on fossil fuels while cutting operational costs. Fortescue’s hydrogen-powered mining truck, the first of its kind, showcases AI’s role in operational efficiency and emission reduction. The company’s decarbonisation strategy, aiming to eliminate fossil fuel use by 2030, relies heavily on AI for data analysis and decision-making.

Adopting technology will help companies gain clearer insights into their ESG performance, identify cost-saving opportunities, and meet sustainability goals more effectively.

The CFO’s role has shifted from financial oversight to strategic leadership on ESG matters. As the world faces increasing pressure to address climate change and sustainability, CFOs must recognise the importance of managing ESG data and adopting technology.

Companies like BHP, Woolworths, and Fortescue show how aligning business practices with ESG standards can create long-term growth and resilience. CFOs who take proactive steps to meet and exceed ESG expectations will mitigate risks, attract investment, improve efficiency, and enhance their reputation.

The challenges ahead are significant, but with the right tools, systems, and leadership, CFOs can position their organisations at the forefront of sustainable business practices.

About the Author:

Thierry Lotrian is CEO of Climate & Decisions, specialising in helping organisations navigate climate regulations through data and AI technologies. Thierry is a highly experienced climate & sustainability and Data & AI managing consultant with over 20 years in the field, including a decade as a Partner at Deloitte Australia. He works closely with C-suite leaders to drive business and regulatory transformations, leveraging data, AI, performance management, and risk management across various industries. 

For more information visit > www.ClimateandDecisions.com