The roadblocks foiling ethical corporate policies and behaviour

Consumers want companies to embrace ethical positions, but government inaction allows environmental abuses and human rights violations to continue.

Consumers want companies to embrace ethical positions, but government inaction allows environmental abuses and human rights violations to continue. Photo: Getty

People power is driving Australia’s biggest companies to behave more ethically, but experts concede too many are “behind the eight ball” on climate change.

The banking royal commission and the Modern Slavery Act have sparked discussions in major boardrooms about ethical behaviour in the supply chains that deliver cheap goods to Australians.

But the local heads of Global Compact Network Australia, the United Nations’ corporate sustainability network, say political inaction is stopping businesses from making decisions on climate change.

Executive director Kylie Porter says the mistreatment of consumers by the finance and banking industries was a wake-up call for all businesses.

“The banking royal commission is something that is absolutely talked about at the executive level,” she told AAP.

“I couldn’t tell you of a CEO where it doesn’t come up in conversation.

“[But] in terms of climate and climate risk, I would say it varies considerably.”

Ms Porter said many Australian businesses who have signed up to the Global Compact network are taking action to ethically address their role in climate change.

ALP climate policy

Greenhouse gases continue to rise as policies remain stuck in “a holding pattern”. Photo: AAP

“There are [also] quite a few who are behind the eight ball,” she said.

“Those companies who have faced, or had threats to face, a shareholder resolution to either ineffective human rights diligence [or] climate risk disclosures, they’re the ones who are responding really positively.

“[But] we don’t see the movement in Australia like you do in Europe in terms of companies committing to net-zero emissions and putting in place mitigation plans to achieve that.”

Senior adviser Corinne Schoch said political inconsistency on climate change was a problem.

“We’re in a holding pattern waiting for some level of indication of what it is that we should be doing so that we’re actually investing in the right thing,” she told AAP.

“I do feel bad sometimes comparing us to other countries in Europe when the political climate is very, very different.”

Ms Porter said while investor groups were driving change within companies, Australian consumers weren’t fully across the impact of slavery on the cheap goods they buy.

“I think there’s more talk about an ethical consumer in Australia than the number that there actually is [ethical consumers],” she said.

“There is an awful lot of talk on social media from the everyday consumer about wanting to know where their products come from.

“[But] it’s only when somebody says to them ‘Did you know your superannuation fund invested in cluster munitions, or did you know your superannuation invested in tobacco?’ that they go ‘Oh I might change super funds’.”

The Modern Slavery Act came into effect on January 1, and companies will begin delivering their compliance statement in 12 months’ time.

Ms Schoch said companies needed to understand they will have to absorb the costs of removing slavery from their supply chains.

“The consumer now wants that T-shirt at $3, without modern slavery,” she said.


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