ESG trends: modern slavery reporting reform, nature-related impacts and ongoing litigation risk

Australian modern slavery reporting

In line with a broader global emphasis on human rights due diligence and reporting, reforms to the Australian modern slavery reporting regime are underway. These may lead to requirements for large businesses to undertake mandatory human rights due diligence, and report on risks in their operations and supply chains and how they respond to those risks.

The process began with a statutory review of the Modern Slavery Act 2018 (Cth), and the report tabled on 25 May 2023.¹

The review focused on whether the Modern Slavery Act had made an impact, and been taken seriously by business and government—ultimately noting there was 'no hard evidence' that the Act had 'caused meaningful change for people living in conditions of modern slavery', and making 30 recommendations to uplift the regime.²

The Federal Government responded to the recommendations in a report released on 2 December 2024—agreeing (in full, part, or in principle) to 25 of the 30 recommendations.³ As to those most relevant to food and beverage businesses:

• Recommendation 4—to lower the threshold for reporting businesses from $100 million in annual consolidated revenue to $50 million—was noted.
• Recommendation 11—to introduce obligations for a due diligence system (intended to mitigate human rights abuses across operations and supply chains)—was noted.
• Recommendation 20—to introduce civil penalties for non-compliance with reporting requirements (ie giving false information in a modern slavery statement)—was agreed in principle.⁴

The Government has since established an Australian Anti-Slavery Commissioner (the Commissioner) to oversee, advise on and promote compliance with the Modern Slavery Act.

• Chris Evans was appointed as the Commissioner in December 2024. Since his appointment, Mr Evans has focused on engaging with businesses and their advisors on reporting compliance, and on advocating for strengthened human rights due diligence, in line with global expectations.⁵

The Government has also now commenced public consultations to progress reforms to the Modern Slavery Act, including on options to enhance the framework, simplify and improve reporting, and target non-compliance.⁶

• The first round of consultations concluded on 1 September 2025—views were sought on changes to implement proposals from the review, including Recommendation 20, and others to refine, clarify and expand the existing mandatory reporting criteria.⁷
• Targeted consultations will also be carried out to progress some of the more complex issues— including any new requirement for businesses to undertaken human rights or modern slavery-specific due diligence.

The ESG legislative agenda overseas

Developments in ESG legislation overseas can also have implications for Australian businesses. Overseas laws can influence the demands and expectations of international business partners, lenders and investors in Australian businesses, across supply chains, as well as⁸ contributing to building community expectations of corporate conduct.

The EU is an example. Despite its recent regulatory rollback, it has adopted, and will adopt, a number of new directives and regulations that require businesses to be undertaking environmental and human rights due diligence and report on risks and impacts. Similar developments are underway in countries such as Canada and the UK, as well as in parts of Asia. 

Increased expectations around businesses' efforts regarding decarbonisation and ethical sourcing have been paired with an increasing vulnerability to litigation on ESG grounds.

Australia has the second-highest number of climate change-related cases, behind the US. Claims and complaints have focused, to date, on resources industries, and their financiers and investors.

That said, strategic litigants and class action promoters are continuing to scrutinise corporate conduct beyond climate change. Because of this, businesses should stay alert to the likelihood of this trend spilling across from a focus on resources to one on other industries with environmental impacts. A particular target area is claims in corporate and consumer law, and, in particular, allegations of misleading or deceptive conduct or 'greenwashing' in headline environment and sustainability-related commitments.⁹

It is more important than ever, as scrutiny builds, that businesses ensure their ESG credentials are assessed holistically and accurately, including by reference to the regulatory guidance and judicial decisions to date.