The Federal Government’s commitment to reduce greenhouse gas emissions by 62-70%, below 2005 levels by 2035, marks a significant milestone on the path to achieve net zero by 2050. Climate action is now central to Australia’s economic direction.
For business leaders and investors, the implications are wide-reaching. Climate policy is becoming a key driver of strategy, risk management and long-term value creation.
The urgency of this transition is reinforced by the Government’s first National Climate Risk Assessment published in September 2025. The findings are clear. Climate-related disasters could cost the Australian economy $40.3 billion each year. As an example, insurance premiums are rising, and some regions are already facing the possibility of becoming uninsurable.
The National risk assessment identifies 63 nationally significant risks across infrastructure, public health, supply chains and the broader economy. These risks are not abstract. They are unfolding now, affecting financial performance, operational resilience and long-term viability.
Businesses are already adjusting
Infrastructure projects are being reassessed as updated flood and fire data reshape risk profiles. In agriculture, water scarcity and seasonal volatility are prompting producers to rethink operating models, invest in adaptive technologies and protect access to export markets.
Across industries, climate risk is influencing investment flows, sector priorities and competitive dynamics. The shift is not just reactive, it is strategic. Organisations are embedding climate considerations into capital planning, procurement and innovation pipelines.
The mandatory climate-related financial disclosure regime, which is being phased in from 31 December 2025, is focusing the attention on corporate ethics. Transparent and credible climate reporting allows investors and stakeholders to accurately assess climate risk and reward businesses with strong transition plans. The market is already distinguishing between those leading and those lagging. As supply chains adapt, organisations that embrace a positive sustainability posture are likely to attract capital and continued support from customers.
For Australian businesses, the message is clear
Climate strategy is now good business strategy. Early movers will gain access to capital, build stakeholder trust and strengthen their competitive position. Those slow to adapt risk falling behind not only environmentally but economically. In an evolving landscape, sustainability leadership means more than meeting regulatory requirements. It calls for a forward looking approach that integrates climate risk and opportunity into core decision-making, encourages innovation and engages stakeholders across the value chain. By stepping up, Australian organisations can have a positive impact on the environment while reducing risk and unlock new opportunities for growth and long-term success.
Article was co-authored by Rachel Jin, HLB Mann Judd Sydney.