Environmental, Social and Governance (ESG) performance has become both a core expectation and a strategic priority for businesses across Australia and New Zealand. When done well, ESG provides a structured way for organisations to operate more sustainably. It helps businesses understand and manage how they impact and are impacted by environmental, social and governance factors. Increasingly, ESG is recognised not only as a compliance requirement but as a driver of profitability, reputation, and operational efficiency.
Looking ahead to 2026, mid-sized businesses are facing rising ESG expectations from regulators, customers, employees and financial stakeholders alike. Companies that define clear ESG priorities and develop realistic, forward-looking plans will be better placed to stay resilient, competitive and prepared as standards and regulatory requirements continue to evolve.
Knowing where to start can be challenging. Many businesses are unsure which issues matter most, or how to focus their efforts with limited time and resources. To help cut through this complexity, we conducted a market analysis of the ESG issues that mid-sized businesses in construction, resources and manufacturing should prioritise in 2026. This analysis drew on recent ESG meta-studies, upcoming compliance requirements, industry expectations and emerging issues gaining public attention. We also leveraged practical insights from our 2025 client work, including obligation analyses we completed, giving us a clear understanding of the compliance pressures businesses are facing. From this, we identified three key ESG priorities for the year ahead, providing a practical starting point as you plan for 2026.
In 2026, climate risk and emissions management will remain a defining focus for mid-sized industrial organisations as regulation tightens and market expectations rise.
From July 2026, Australia’s climate-related disclosure standards will expand to capture many medium-sized businesses, requiring reporting on climate risks and opportunities. Even if your business is not yet directly mandated to report, these standards are already shaping expectations in the supply chains of most markets. Banks, insurers, major customers and other stakeholders are increasingly seeking robust climate and emissions data.
The priority is not just compliance. When approached strategically, GHG and climate reporting becomes a practical tool that supports broader business objectives. GHG inventories provide businesses with the foundational data needed for multiple purposes, including identifying GHG risks and reduction opportunities, public reporting and participation in voluntary GHG programs. We will further explore the opportunities businesses have to capture value from emissions inventories in a dedicated blog in 2026.
Organisations that are proactive, will be better positioned to manage risk, create value, and stay competitive as expectations evolve across Australia and New Zealand.
As expectations around workplace health and safety evolve, psychosocial risk management is becoming a core responsibility for industrial organisations across Australia and New Zealand. Regulators are increasingly clear that mental health risks must be managed with the same rigour as physical hazards, and this shift is reshaping what good organisational safety practice looks like.
Australia’s Model WHS Act requires employers to explicitly identify, assess, and control psychosocial hazards. As of December 2025, every Australian state has adopted similar regulations. For mid-sized organisations, this means wellbeing initiatives alone are no longer enough, leaders must be able to show structured, evidence-based approaches to managing mental health risks within their operations.
Construction and manufacturing industries continue to report some of the highest rates of psychological injury linked to job stress, and workforce fatigue. A survey of major Australian construction and infrastructure companies found that employee mental health conditions exceeded population norms by 40% for depression, 38% for anxiety, and 37% for stress.
These pressures drive real operational consequences: reduced productivity, higher turnover, increased workers compensation costs, and greater scrutiny from clients and regulators. According to an industry survey of Australian construction leaders, over half reported losing skilled workers due to high levels of stress and burnout within the workforce.
Businesses that take a proactive approach will not only meet regulatory expectations but also improve culture, retention, and overall operational performance. With genuine commitment to employee wellbeing becoming a strategic differentiator.
Responsible sourcing is rapidly becoming a central ESG priority as both Australia and New Zealand tighten modern slavery and labour-risk expectations. What previously applied mainly to large organisations is now shifting toward mandatory due diligence for businesses of all sizes.
Australia is progressing reforms to the Modern Slavery Act, supported by the new Anti-Slavery Commissioner, which will introduce clearer requirements, stronger enforcement, and greater scrutiny of how organisations identify and manage labour risks. New Zealand’s proposed Modern Slavery Bill moves in a similar direction, requiring medium sized businesses to take reasonable and proportionate steps to prevent and address exploitation. Businesses unable to demonstrate credible and consistent practices risk losing competitiveness and contract opportunities.
Acting early is the advantage. Mapping high-risk suppliers, strengthening procurement processes, engaging with suppliers, and documenting how risks are assessed and managed will help mid-sized businesses meet rising standards, avoid disruption and build long-term supply chain resilience.
As ESG expectations become mainstream, many mid-sized industrial companies risk falling into common traps that reduce impact and waste resources. Being aware of these pitfalls can save time, cost and credibility.
When ESG is handled purely as a compliance or marketing exercise, it rarely delivers meaningful change. For mid-sized businesses in 2026, this approach is increasingly risky. Customers, financiers, insurers, employees and regulators expect evidence of real action, not just policy statements. Businesses that treat ESG as an afterthought risk missing practical benefits such as improved efficiency, reduced environmental and safety risks, stronger stakeholder trust, and a competitive edge in supply chain or contract tendering.
Exaggerating or overstating environmental or social achievements, even unintentionally, can seriously damage trust. As regulators increase enforcement and consumers become more discerning, claims like “sustainable,” “eco-friendly,” or “carbon neutral” need to be backed by clear evidence and robust data. If these claims are vague, unqualified, or unsupported, businesses risk reputational damage, loss of trust from customers and partners, and even regulatory penalties.
Without accurate data relating to your emissions, resource use, waste, safety incidents or social/ community impacts, decision‑making becomes guesswork. A robust ESG strategy needs a clear baseline so progress can be measured, improvements demonstrated, and risks identified. As ESG expectations increase, stakeholders will demand reliable data; weak or inconsistent data undermines credibility.
In 2025, we observed three key tools and processes commonly missing across most industries:
Addressing these gaps provides the foundation for confident reporting, informed decision-making, and stronger ESG performance.
Now is the time to map out your 2026 ESG roadmap. We’ve highlighted the key priorities and risks for 2026 so you can focus on what matters most. Setting the right priorities early will help ensure your business stays ahead of regulatory change, customer expectations, investor scrutiny and differentiate you as a leader in ESG.
If you’re unsure whether these priorities reflect your current reality, our free ESG Mastery Scorecard offers a quick, structured way to benchmark your sustainability practices. It highlights strengths, identifies gaps and helps clarify which ESG issues matter most for your business in 2026.
For organisations ready to move from insight to action, everfocus partners with company leaders to turn ESG priorities into practical, measurable strategies. We bring practical insights from Resources, Construction, and Manufacturing to navigate industry-specific challenges, and love nothing more than to help our clients stand out to their key stakeholders and deliver real value to their business.