From ambition to action: What three years reveal about boardroom climate action

Australian boards are moving from aspiration and ambition to action, but
progress is uneven. As some organisations take the lead, what can others learn
from their approach?

Since 2022, climate governance has become increasingly embedded in Australian boardrooms. Over this time, many directors have moved from laying the foundations to overseeing more structured, forward-looking transition planning. But while a growing number of organisations are building capability and integrating climate into business frameworks, questions remain about the pace and consistency of progress.

Laying the groundwork: 2022 to now

When the AICD launched its inaugural Climate Governance Forum in 2022, the policy environment was beginning to shift. The election of the Albanese government brought renewed momentum to climate and energy reform, and shortly afterwards, Australia’s emissions reduction targets were legislated.

At that time, directors were seeking greater clarity on how climate issues aligned with their legal duties. To support this, the AICD commissioned legal advice from Bret Walker AO SC and Gerald Ng SC. The opinion confirmed that directors could consider stakeholders, environmental matters, and long-term risks as part of their duty to act in the best interests of the corporation. The opinion confirmed that there is no duty to maximise short term profits and directors have considerable discretion to determine what approach works for their organisation. The advice was accompanied by a practice statement from the AICD, encouraging directors to take a long-term view.

The inaugural Climate Governance Forum in 2022 focused on building foundational understanding: what climate governance means, how to apply frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), and how to begin asking the right questions at board level. As NAB Chair Philip Chronican GAICD noted in his keynote: 'The Australian economy is going to grow and increase investment anyway. What we are changing is where we invest and what will drive growth.'

From foundations to implementation

Three years on, the national and corporate context has evolved considerably. The introduction of mandatory climate reporting under globally-aligned standards represents a major milestone, requiring boards to step up oversight of climate risk, transition strategy, and scenario analysis.

Many directors have responded by building internal capability and refining board processes. At the 2024 Forum, there was strong interest in how to resource climate governance effectively and embed it within committee structures, with several ASX-listed directors noting that audit, risk and remuneration committees are now routinely engaging with climate-related matters.

Yet while governance maturity is growing, progress remains uneven.

The reality check

Australia’s current targets include a 43 per cent emissions reduction by 2030 (on 2005 levels) and net zero by 2050. A 2035 target is expected to be announced later this year.

Recent national emissions data highlights the scale of the challenge. While Australia has recorded a 27 per cent reduction in emissions on 2005 levels, most of this has come from land use change and electricity decarbonisation. UNSW researchers highlight that, excluding land use, total emissions have fallen by three per cent. Meanwhile, fugitive emissions, primarily from fossil fuel extraction, now comprise over 10 per cent of national emissions and have continued to rise.

The corporate response reflects this mixed picture. Some organisations are now on their second or third iteration of transition plans, testing their assumptions, aligning capital allocations, and engaging with investor expectations. Others are progressing more slowly, or recalibrating targets to increase implementation flexibility. As highlighted during a Climate Governance Forum 2023 panel on sector readiness, not every company will move at the same pace, but all need to be on the path, with Ewen Crouch AM FAICD saying: 'Make someone responsible, then give them milestones that can be monitored. Without that, people can go around in circles.'

At the same time, scrutiny of corporates’ approach to climate continues with ongoing focus from ASIC, ACCC, major investors and environmental groups. Greenwashing – a term used to describe an over-statement of a firm’s climate or environmental credentials – has now been joined by a new term, ‘greenhushing’ – referring to the practice of limiting disclosure to minimise legal and/or reputational exposure.

Avoiding the leadership gap

This divergence raises a key issue: how to avoid a widening gap between climate leaders and followers. Boards that act early have more time to test, adapt, and course correct. Those that delay may face compressed timelines, regulatory risk, or market disadvantage. There is no getting away from the fact that some see advantage in delay.

AICD’s guidance on climate target-setting, transition planning and mandatory climate reporting, released as part of the Climate Governance Initiative Australia, all emphasise the need for credible, actionable plans grounded in board-level leadership.

Looking ahead

This year’s Climate Governance Forum 2025 builds on three years of constructive conversation, helping directors track where we’ve come from and where we’re heading. The program will explore key drivers of effective execution, including transition financing, scenario planning that addresses both physical and transition risk, early insights from climate reporting implementation, and how organisations are identifying growth opportunities in the net zero economy.

Climate Governance Forum 2025, Melbourne and virtual

While measurable progress has been made since 2022, the challenge now is ensuring this progress is sustained, sector-wide, and matched to the scale and pace required. Hear from those at the leading edge at Climate Governance Forum 2025, the one major event of the year that brings togethers directors to learn from and with each other on this topic.  

This year’s program features Tom Pockett MAICD (Chair, IAG and Stockland) delivering the opening keynote, alongside contributions from leading voices including The Hon Matt Kean (Climate Change Authority) and Vanessa Sullivan GAICD (AGL, CSIRO), Rebecca McGrath AM FAICD (Macquarie Group), Kate O’Rourke (ASIC), Barry Sterland PSM (Productivity Commission), Andrew Fraser GAICD (AART; Motorsport Australia; Brisbane Broncos) and more.

See the full program. And see you there.