Environmental, Social and Governance (ESG) considerations have moved from a voluntary reporting nicety to a mandatory compliance obligation for a growing number of Australian organisations. The Australian government’s mandatory climate-related financial disclosure regime — administered through ASIC and aligned with TCFD (Task Force on Climate-related Financial Disclosures) requirements — is being phased in from 2024, with scope expanding to mid-tier companies in subsequent years.

For risk and compliance teams, this creates a new set of obligations that sit squarely within their mandate. Climate risks must be identified, assessed, and disclosed. ESG obligations must be tracked alongside existing regulatory requirements. Evidence of compliance must be maintained. And the whole programme must be integrated with existing governance structures rather than managed as a separate, siloed function.

This is precisely the problem that GRC software is designed to solve. In this article, we explore how compliance and risk management platforms support ESG initiatives — covering the intersection of GRC and ESG, the specific capabilities that matter for sustainability reporting, and how Lahebo helps Australian organisations manage their ESG obligations within the same integrated system they use for all other risk and compliance management. Our broader GRC software buyer’s guide covers the full platform landscape for those earlier in the evaluation process.

Why GRC and ESG Are Converging

At their core, ESG frameworks and GRC frameworks are addressing the same organisational challenge: how does an organisation identify, manage, and report on the risks and obligations that arise from its relationship with the world around it? Climate risk is a risk. Environmental compliance obligations are compliance obligations. The governance structures required to oversee ESG commitments are the same governance structures used to oversee all other enterprise risks.

Treating ESG management as a separate function — with its own data, its own team, its own reporting processes — recreates the silo problem that integrated GRC platforms were built to eliminate. When climate risks are managed in an ESG-specific tool rather than in the same risk register as operational and financial risks, the board can’t see the full risk picture. When ESG obligations are tracked separately from regulatory compliance obligations, nobody has a complete view of what the organisation must do and when. Integration is the solution here, just as it is for risk and compliance more broadly.

Australia’s Evolving ESG Disclosure Requirements

Australia’s mandatory climate-related financial disclosure regime represents the most significant expansion of compliance obligations for large Australian organisations in years. Under legislation passed in 2024, entities meeting certain size thresholds must produce annual climate statements covering:

• Governance arrangements for managing climate-related risks and opportunities
• Climate risk identification and assessment (physical and transition risks)
• Strategy for managing identified climate risks
• Metrics and targets used to measure climate performance
• Scope 1, 2, and (progressively) Scope 3 greenhouse gas emissions

The regime follows a phased implementation: large entities from FY2025, mid-tier companies from FY2026, and smaller entities from FY2027. The reporting requirements are subject to limited assurance initially, moving to reasonable assurance over time — which means the evidentiary standards will become increasingly stringent.

Beyond climate disclosure, Australian organisations also face obligations under environmental legislation that varies by state and territory. For organisations operating in Victoria specifically, our guide to environmental legislation in Victoria covers the specific compliance requirements in detail.

How GRC Software Supports ESG Management

A well-implemented GRC platform supports ESG management across four key functions:

Climate Risk Identification and Assessment

Climate risks — both physical risks (flood, extreme heat, drought) and transition risks (regulatory changes, carbon pricing, shifts in market demand) — should be assessed using the same risk scoring methodology as operational and financial risks. A GRC platform with a configurable risk register allows climate risks to be assessed against standard likelihood and consequence scales, assigned to appropriate owners, linked to treatment actions, and monitored over time alongside all other enterprise risks. This provides the board with a unified view of climate risk within the context of the broader risk landscape — not a separate climate report that sits outside the mainstream risk governance framework.

ESG Obligation Tracking

Climate disclosure obligations, sustainability reporting requirements, environmental licence conditions, and social responsibility commitments are obligations in the same sense as WHS obligations and privacy requirements. A GRC platform with compliance obligation management can track these alongside other regulatory requirements — assigning ownership, setting review and attestation cadences, and capturing evidence of compliance. The platform’s legislation library module — which monitors changes to relevant legislation automatically — is particularly valuable for ESG obligations, where the regulatory landscape is evolving rapidly. For more on how legislation libraries support ESG compliance specifically, see our article on the role of a legislation library in ESG reporting.

Sustainability Data Capture and Evidence Management

Climate disclosure reporting requires quantitative data — greenhouse gas emissions, energy consumption, water usage, waste metrics — alongside the qualitative governance and strategy disclosures. A GRC platform can serve as the system of record for ESG data collection: creating obligation tasks for data collection across business units, capturing supporting evidence, and maintaining the audit trail necessary for the assurance requirements that apply to climate disclosures. This is particularly important as the assurance requirements for climate statements evolve — the evidence capture built into an integrated GRC platform provides the traceability that auditors require.

ESG Reporting and Disclosure

Climate statements and sustainability reports require data that is consistent, traceable, and supported by evidence. A GRC platform that has been used to track ESG obligations, capture supporting data, and maintain audit trails provides a reliable foundation for producing these reports. The automated reporting capabilities of a modern GRC platform — configurable dashboards, exportable data, evidence attached to specific obligations and risk records — support the production of climate statements that can withstand assurance review.

Aligning ESG with Your Existing GRC Framework

The most efficient approach to ESG management for organisations that already have a GRC platform is to extend their existing framework rather than implement a separate ESG tool. This means:

• Adding climate risk categories to the existing risk register, using the same scoring methodology as other risk categories
• Adding ESG and climate disclosure obligations to the compliance obligation register, alongside WHS, privacy, and other regulatory requirements
• Creating ESG-specific roles and workflows within the platform — sustainability managers who own climate obligations, evidence collection tasks assigned to operational teams, attestation workflows for ESG data
• Configuring reporting dashboards that can produce ESG-specific views alongside the broader enterprise risk and compliance picture

This integrated approach gives the board a single source of truth for all governance, risk and compliance activities — including ESG — rather than requiring them to synthesise information from multiple systems and reports.

How Lahebo Supports ESG and Sustainability Compliance

Lahebo’s integrated GRC platform is designed to accommodate ESG management within the same system used for all other risk and compliance functions. Climate risks can be assessed in the risk register alongside operational, financial, and strategic risks. ESG and climate disclosure obligations can be tracked in the compliance obligation module, with Australia’s mandatory climate disclosure requirements available as pre-built obligation templates. Evidence and data collected through obligation workflows maintains the audit trail necessary for assurance review.

For organisations beginning their ESG compliance journey — particularly those facing their first mandatory climate disclosure obligation under Australia’s new regime — Lahebo provides a practical starting point: extend your existing risk register to include climate risks, map your disclosure obligations into the compliance module, and use the platform’s reporting capabilities to produce climate statements that meet the required disclosure standards.

Frequently Asked Questions

Is climate-related financial disclosure mandatory in Australia?

Yes. Australia introduced mandatory climate-related financial disclosure legislation in 2024, applying to entities that meet certain size and reporting thresholds. The regime is being phased in: large entities from FY2025, mid-tier companies from FY2026, and smaller entities from FY2027. Organisations should check their reporting obligations with reference to the specific thresholds in the legislation and seek specialist advice if uncertain about their requirements.

Do we need a separate ESG platform or can GRC software handle it?

For most organisations, a well-configured GRC platform can handle the core requirements of ESG compliance management — risk identification, obligation tracking, evidence capture, and reporting — without a separate ESG platform. Specialist ESG platforms offer additional capabilities like automated carbon accounting, supply chain emissions tracking, and ESG benchmarking that go beyond what a GRC platform provides. But for the governance, compliance, and risk management aspects of ESG — which are the foundation of climate disclosure — an integrated GRC platform is the right tool.

What is TCFD and how does GRC software help with TCFD alignment?

The Task Force on Climate-related Financial Disclosures (TCFD) is a framework for disclosing climate-related financial risks and opportunities across four thematic areas: Governance, Strategy, Risk Management, and Metrics & Targets. Australia’s mandatory disclosure regime is aligned with TCFD principles. A GRC platform supports TCFD alignment by providing the risk management infrastructure (risk register, compliance tracking, evidence capture) needed to document a systematic approach to climate risk management — which is the foundation of credible TCFD-aligned disclosure.

ESG Compliance Starts With Good GRC

The organisations that will navigate Australia’s emerging ESG disclosure requirements most effectively are those that treat climate and sustainability obligations as an extension of their existing risk and compliance management infrastructure — not as a separate function requiring separate tools, separate teams, and separate governance structures.

GRC software that is genuinely integrated — connecting risk registers, compliance obligations, legislation monitoring, and reporting in a single system — provides the foundation for ESG compliance without the duplication and inconsistency that comes from managing ESG separately. For Australian organisations preparing for mandatory climate disclosure, now is the time to extend your GRC framework to cover ESG obligations before the reporting deadlines arrive.

Want to understand how Lahebo can support your ESG compliance programme? Book a demo and we’ll show you how to extend your existing risk and compliance framework to cover sustainability reporting requirements.