Insurance sector digs into impact of mandatory climate reporting
Businesses are being encouraged to prepare for the impact of mandatory climate disclosure in Australia.
Earlier this year, the federal government passed amendments to the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth), resulting in mandatory climate reporting for larger businesses in Australia.
The issue was examined during a recent address to members of the Underwriting Agencies Council, with particular attention paid to how the new legislation will affect the insurance sector.
Speaking at the event, Prateek Vijayvergia, Xceedance Business Leader – Key Accounts, Australia and New Zealand, said that while 75% of ASX 200 companies were committed to or already performing climate reporting, the number fell to 10.5% for broader ASX companies.
“There’s a lot more awareness and commitment and urgency that we see in the Australian market now and this is not limited only to the insurance business, but for all larger Australian businesses,” he said.
“Although this is all good, there is a gap in climate-related reporting among ASX-listed entities, and the depth and the quantification.”
Joining Vijayvergia in the discussion was Sharanjit Paddam, Principal – Climate Analytics at Finity Consulting, who said that from 31 December 2025, in addition to an Annual Report, large companies will need to submit a Sustainability Report — what Paddam referred to as “the home for ESG disclosures”.
Four pillars underpin the disclosure standards — governance, strategy, risk management, and metrics and targets. Paddam emphasised that the devil is in the detail.
“You not only have to disclose the financial impacts on your balance sheet today and your income statement today, but also in the short-, medium- and long-term future,” he said.
“They (ASIC and APRA) want hard numbers to be put in the accounts about how climate change is financially going to affect the operations of the company.”
Paddam explained: “At the heart of the disclosure is really what are the financial impacts of climate change on your company, investors, customers and shareholders; to understand that and to allocate capital and make investment decisions informed by how climate change might affect your business.”
Paddam added that companies need to consider their own impact on climate change.
“The world is changing in disclosures in a very big way over the next few years, and companies are going to have to think about not just accounting for their financial outcomes, but also their climate outcomes,” he said.
“These are mandatory standards — this is locked in, and it will be required to happen over the next few years, and it is intended that these standards will change the economy and they will drive changes throughout the way we do business.”
A particular challenge will be the reporting of Scope 3 emissions — those indirectly generated by the activities of an organisation — due to lack of data, methodology and resources.
“What’s really helping all of us is the advancement in technology so there are better ways of collecting information and data around emissions,” Vijayvergia said.
“And also, to then slice and dice that information so it can be used to make a plan around climate risk.
“It’s becoming more comprehensive and almost integral to the overall reporting that’s happening for an organisation.”
Organisations impacted by these legislative changes include those that produce accounts under the Corporations Act and meet any two of the following criteria: consolidated assets more than $25m; consolidated revenue more than $50m; or 100 or more employees.
Paddam said the new requirements would capture some of the larger underwriting agencies and brokers.
“It’s an opportunity to look at the services that you are providing and how good a partner you are for your insurance provider, or as a distributor of insurance products, to see where you could uplift your services in this respect,” he advised.
“The things we insure, the things we invest in, are all intended to change as a result of these disclosures, and getting your heads around that quicker and faster than your competition is very important.”
Image credit: iStock.com/pcess609
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A concrete use for carpet fibres
Australian engineers have come up with an unexpected use for discarded carpets and other textiles: as a means to make concrete stronger and resistant to cracks.
This innovation, led by scientists at RMIT University, addresses a major challenge in the construction sector, where the annual cost of repair for cracks in reinforced concrete structures in Australia is about $8 billion. In the US, the cost is estimated at US$76 billion per year.
The research team is working with partners including Textile Recyclers Australia, Godfrey Hirst Australia and councils in Victoria to conduct field studies of on-ground slabs made of reclaimed textiles.
Lead researcher Dr Chamila Gunasekara, from RMIT, said the team had developed a technique using waste carpet fibres to reduce early-age shrinkage cracking in concrete by up to 30%, while also improving the concrete’s durability.
Using the state-of-the-art textile research facilities at RMIT, the team of civil engineers and textile researchers has also been able to test other discarded textiles, including clothing fabrics, in strengthening concrete.
“Cracking in early-age concrete slabs is a longstanding challenge in construction projects that can cause premature corrosion, not only making a building look bad but also risking its structural integrity and safety,” said Gunasekara, an ARC DECRA fellow from the School of Engineering.
“Scrap carpet fibres can be used to increase concrete’s strength by 40% in tension and prevent early cracking, by reducing shrinkage substantially.”
Laboratory concrete samples have been created using the various textile materials and shown to meet Australian Standards for engineering performance and environmental requirements.
Concrete samples made with carpet fibres. Image credit: RMIT University.
Addressing a big waste challenge
Gunasekara said the disposal of carpets and other textiles poses an enormous environmental challenge.
“Australia is the second largest consumer of textiles per person in the world, after the US. The average Australian purchases 27 kg of new clothing and textiles every year, and discards 23 kg into landfill,” he said.
“Burning carpet waste releases various toxic gases, creating environmental concerns.”
Dr Shadi Houshyar, a textile and material scientist at RMIT, said that discarded firefighting clothes are a particularly challenging waste issue. This is because the same qualities that make these materials ideal for firefighting also make them difficult to recycle.
“Up to 70% of textile waste would be suitable for conversion into usable fibres, presenting an opportunity in the materials supply chain,” said Houshyar, from the School of Engineering.
Bringing fabric-reinforced concrete into the real world
To capture the unexpected conditions encountered in real-world construction projects, the team will conduct field trials with support from industry and local government partners.
These trials, as well as computational modelling, will be funded by the ARC Industrial Transformation Research Hub for Transformation of Reclaimed Waste Resources to Engineered Materials and Solutions for a Circular Economy (TREMS) and an early-career research grant. TREMS is led by Professor Sujeeva Setunge from RMIT.
The team is collaborating with Professor Andrzej Cwirzen from Luleå University of Technology in Sweden on the computational modelling.
Their paper, ‘Enhancement of concrete performance and sustainability through incorporation of diverse waste carpet fibres’, has been published in Construction and Building Materials.
Top image caption: PhD scholar Nayanatara Ruppegoda Gamage and Dr Chamila Gunasekara with concrete samples made using textiles. Image credit: RMIT University.
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