Leading the charge

Nations around the world, including Australia and New Zealand, are also implementing mandatory climate reporting, forcing organisations to take action.

We spoke to Adam Davis, ESG Advisory Lead for Australia, to learn how AECOM works with organisations to help them embed ESG into their operations.

Tell us about AECOM’s ESG Advisory services in Australia

ESG Advisory is part of our advisory services offering, which comprises four pillars: program advisory, infrastructure advisory, digital advisory, and ESG advisory. We aim to combine these services to deliver impactful and sustainable solutions for our clients. This is supported by deep technical skillsets across the markets we operate in, including transport, energy and water.

We target work at the initial stages of the infrastructure investment cycle, supporting our clients in understanding and addressing their biggest ESG challenges, such as climate and nature-related risks.

What are the biggest ESG advisory challenges for the industry and clients, and what opportunities do they present?

New legislation is mandating large organisations to measure and report on climate-related disclosures. In New Zealand, legislation has been on the horizon for several years and is coming into effect this year. Meanwhile, in Australia, it has only come to fruition in the past year and is already expected to be implemented by 2026.

The increasing impacts of climate change drive this momentum, leading to growing demand for ESG disclosure and due diligence. However, organisations face several challenges in meeting these requirements, including defining risk ownership, identifying transition opportunities, establishing a governance framework, and understanding and addressing social needs into corporate work.

Large organisations must now grapple with and adapt to these changes, creating a real opportunity for us to support them at various stages of their ESG journey, whether they are just starting out or are more mature organisations seeking to operationalise their corporate commitments and undertake detailed assessments of ESG or climate-related risks and opportunities across their portfolios.

Can you tell us more about the tools and approaches AECOM uses to embed sustainability and resilience in projects?

We developed a digital climate risk tracking tool that can provide clients with a comprehensive analysis of climate scenarios and hazards and an understanding of physical climate risks, aiding asset managers and decision-makers in responding to and reporting on these risks.

Unlike the majority of ‘black box’ climate products on the market that only provide a climate exposure level score for reporting, our tool transforms the way climate risk assessments are conducted. It transparently gathers and displays the climate data for holders of large asset portfolios and can be customised for integration at each stage of the asset life cycle, from initial planning or acquisition to design, construction, and ongoing operations and maintenance.

We recognise ownership of climate risk frequently changes throughout the life cycle, and spreadsheets can become cumbersome when managing multiple assets or programs of work. Having all the information in a single online space and managed through a replicable process enables our clients to achieve efficiencies as they scale their responses to climate risk across their portfolios.

Additionally, we have various resilience assessment tools stemming from our work with the Rockefeller Foundation's 100 Resilient Cities initiative and the Great Barrier Reef Foundation’s Resilient Reefs initiative. These tools can analyse various climate and non-climate hazards against factors that influence exposure and vulnerability for assets, services, ecosystems and communities. We can use these tools to collaborate with our clients and determine which actions should be highest priority for addressing resilience challenges and responding to risks.

Can you share an example of how we have helped our clients to embed resilience into their work?

We are assisting a number of clients across the aviation, transport, water, property and energy sectors. This includes our work over the past 9 years with Stockland, an Australian property development company, in understanding the climate-related risks associated with their extensive property portfolio. Our work has helped Stockland make informed decisions related to property acquisitions and divestments, asset management, and capital works programs. By embedding climate risk considerations into their existing processes, we have helped Stockland reduce its risk profile.

To integrate resilience into our clients' work, we take a collaborative approach to understanding their assessment and reporting needs. We apply robust tools to identify priority risks and support clients in communicating these insights to governance bodies and the community, managing these risks, and reporting on them.