ESG Impact: What you need to know – September 2025
The latest ESG Impact newsletter explores Australia’s first National Climate Risk Assessment and 2035 emissions reduction targets, plans taking shape for a nationwide scheme to recycle and reuse solar panels, new thinking on generating financial and environmental returns in the construction industry, plus a grant to promote consistency across the agricultural sector, and more.
POLICY
Climate Risk Assessment reveals cascading impacts
Australia faces escalating climate hazards with the country’s first National Climate Risk Assessment providing a comprehensive look at how climate change could significantly impact eight key systems, such as health, infrastructure, the economy, First Nations’ values and knowledge, and the environment.
Developed by the Australian Climate Service, a partnership between the Bureau of Meteorology, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australian Bureau of Statistics (ABS) and Geoscience Australia, its key findings show that climate-related events are increasing in frequency and severity. Sea level rise is projected to expose 1.5 million people to coastal flooding by 2050, and climate change is already driving economic losses, with property losses projected to reach AUD 611 billion in the same timeframe. In response to the findings, the Federal Government’s National Adaptation Plan provides a framework for a national response to priority risks.
Shortly after the release of the National Climate Risk Assessment and accompanying National Adaptation Plan, the Federal Government announced its target to reduce emissions to 62–70 per cent below 2005 levels by 2035, with Treasury noting that modelling shows “orderly action toward net-zero will support economic growth, higher living standards and employment”.
Why does it matter?
Every increase in warming results in more severe changes to our climate, and more severe impacts on our way of life. The National Climate Risk Assessment provides an understanding of how the decisions made today will shape our resilience for the future, or lock in our reliance on fossil fuels. The assessment is also necessary in informing action, and the National Adaptation Plan represents a significant step in the Australian Government’s response to climate change by providing a framework for addressing priority risks.
Climate change was a focus for the Federal Government this month with the release of the National Climate Risk Assessment and the announcement of the new emissions reduction targets. The Climate Change Authority (CCA), which advised on the targets, notes that achieving the 62–70 per cent reduction in emissions by 2035 will require improving the efficiency and emissions intensity of industry and mining, electrifying buildings and vehicles, and increasing the pace of electricity sector decarbonisation. The CCA highlights that while Australia’s regions will experience both opportunities and disruption from decarbonisation, setting an ambitious target can help unlock investment in skills, infrastructure, and community-led transition planning—creating new jobs and supporting regional development.
Stewardship scheme progress for solar panels
Commonwealth, state and territory governments have come together to progress the first national solar panel reuse and recycling scheme. An agreement was reached at the Energy and Climate Change Ministerial Council meeting in mid-August, with discussion of the scheme aiming to direct solar panel waste from landfill towards remanufacture or recycling. NSW, which is currently developing a mandated stewardship program for batteries, will work with other jurisdictions to create a Regulatory Impact Statement, while the Commonwealth will work with states to test and validate a national product stewardship scheme. All parties have agreed to report back on progress in early 2026.
Why does it matter?
Australia is a world leader in rooftop solar with more than 4 million installations across the country. And while more than 95 per cent of a solar panel is recyclable – containing valuable materials such as aluminium, glass, copper, silver and silicon – the Smart Energy Council estimates that less than five per cent of the millions of solar panels decommissioned each year are recycled. It also estimates that around one-third of solar panels could be re-used instead of thrown away. This could contribute up to 24 gigawatts of energy by 2040, which is enough to power six million homes a year.
The Regulatory Impact Statement will help the Federal Government evaluate options for a national mandatory product stewardship scheme that could extract significant value from decommissioned solar panels and their batteries, including more Australian jobs in the re-manufacturing industry.
INDUSTRY
Energy transition model for the Pilbara
Could a global hub for mineral and energy resources be transformed into a renewable energy powerhouse? A new report commissioned by the CEFC shows a shared transmission model for the Pilbara region has potential to significantly cut emissions while also driving economic and environmental benefits. The report explores the benefits of a Common User Transmission Infrastructure (CUTI) system, which would enable multiple users and generators to connect to a single, shared grid. The CUTI system would replace the traditional model, where each miner builds and operates its own infrastructure, and would be a key facilitator of the renewable electricity transition.
The report finds that a CUTI approach would result in a 21 per cent reduction in land required for transmission and a 29 per cent reduction in new transmission line length. It also identifies a AUD 30 billion savings opportunity compared to the current siloed approach, including a AUD 4 billion in avoided transmission costs and AUD 26 billion in avoided generation and storage costs over 25 years.
Why does it matter?
The Pilbara region is significant to the West Australian economy, contributing close to 20 per cent of its total economic output. It also accounts for more than 40 per cent of WA’s emissions, primarily from the region’s major industrial producers, as well as approximately 23 per cent of the national safeguard facility total greenhouse gas emissions. The report notes that electrification is a key means for achieving emissions reduction targets in the Pilbara region, but that its current North-West Interconnected System is driven by 98 per cent fossil fuels and 2 per cent renewables.
The report notes that the Pilbara is a key region for the growth of green industries, such as green steel and ammonia. New transmission infrastructure may unlock significant opportunities in a region rich in solar and wind resources, and the report shows that a common-user model is the most efficient means of building it.
Supporting emissions reporting at the farm gate
Consistency of farm-level greenhouse gas emissions calculators looks set for improvement with Agricultural Innovation Australia (AIA) receiving a AUD 6.4 million Federal Government grant to help farmers and agricultural businesses estimate emissions from on-farm activities, such as those from livestock, manure management and nitrogen fertiliser.
As a not-for-profit company established to facilitate joint investment and collaboration in important cross-industry agricultural issues, AIA will provide free access to its Environmental Accounting Platform and open-source calculator code through to June 2028. These will initially be aligned to the Greenhouse Accounting Framework (GAF) Tools for Australian Primary Industries, before transitioning to the Australian Government’s forthcoming voluntary emissions and reporting standards for agriculture, fisheries and forestry industries.
Why does it matter?
Consistent, accurate and accessible environmental accounting tools are vital for Australia's rural industries. The AIA grant allows the agricultural industry to access a free tool across its value chain and ensures that other emissions calculators in the market have access to the same code and assumptions. This enables producers to make an informed choice when choosing their preferred provider.
During a recent exchange with Westpac’s Business & Wealth Sustainability team, AIA CEO Sam Brown noted that consistency in emissions’ data builds confidence in areas such as on-farm decision making, reporting, accessing finance and meeting sustainability goals.
“Standardisation underpins trust, which can support the entire supply chain and help shape a united Australian narrative around emissions and reduction,” he said. “Through this grant, producers – from niche growers to large mixed enterprises – will be able to access consistent, credible emissions insights that drive smarter decisions and deliver stronger environmental and business outcomes.”
Rachel Kerlin, Sector Lead Agribusiness, Business & Wealth Sustainability at Westpac says the bank is focussed on helping customers identify credible tools and resources developed by industry.
“We support the development of tools that reduce complexity and simplify reporting for our customers,” she says.
INNOVATION
Circular construction system turns components into assets
A German technology company is taking an innovative approach to circularity in the construction industry. BetaPort Systems is pioneering a building model where modular timber components are used to generate financial returns for investors.
Under the company’s Beta Finance model, building components such as façades, beams and staircases are designed to last for more than 80 years, and this longevity positions them as assets of financial value. Every element is digitised and assigned a material passport, so its history can be traced from production to reuse. Returns for investors come in the form of income generated during use, reuse across multiple projects and residual value at the end of the component’s lifecycle.
In the traditional approach to building, re-use is not considered in the design phase and materials are wasted at deconstruction. In contrast, circular principles aim to eliminate waste, keep products and materials circulating at their highest value and regenerate natural and social systems. BetaPort’s innovative model may see these principles delivering both environmental and financial returns.
Why does it matter?
The buildings and construction sector accounts for 37 per cent of global emissions. In Australia, buildings and infrastructure are directly responsible for almost a third of the country’s total carbon emissions, and indirectly responsible for more than half of all emissions.
A report from the Ellen MacArthur Foundation shows that while transitioning to renewable energy and incorporating energy efficiencies can address 55 per cent of emissions, the remaining emissions are generated from the production of goods we use everyday.
The application of circular principles has a significant role to play in the decarbonisation of industries such as construction. As highlighted in the July issue of ESG Impact, a report from circular economy consultancy Coreo reveals that the average building project discards 141kg of material per square metre. Circular approaches, such as those developed by BetaPort, may play a significant role in reducing embodied emissions.
Westpac in Action
Scaling up metals for the low-carbon future
Global focus is sharpening on the key minerals essential to decarbonisation and a new Westpac IQ article looks at the outlook for copper and aluminium, with insights from leaders at Alcoa Australia, global resources research house Wood Mackenzie and Westpac. What are Australia’s prospects?
Property fit for the future
A new interactive guide from Westpac helps owners, investors and managers of office, retail and industrial buildings measure how energy-efficient upgrades can drive value,
resilience and sustainability. Future-Ready Real Estate, created in collaboration with the Energy Efficiency Council, includes insights into policy and technology trends shaping the sector, case studies on how energy upgrades are driving value, tools to help improve energy performance.
Bluecurrent’s Climate Bonds Certified Green Loan
Westpac Banking Corporation and Westpac New Zealand Limited acted as Joint Sustainability Coordinators on Bluecurrent’s NZ$2.5bn Climate Bonds certified green loan. The loan is certified under the Water Infrastructure and Electrical Grids and Storage Sector Criteria in the Climate Bonds Standard v4.2. Proceeds will support the continued commitment and investment by Bluecurrent in the energy transition through electricity smart metering and the expansion into digital water metering across Australia and New Zealand.
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