Green Bonds in Corporate Finance: A Genuine Investment or Just Another PR Move?

by Joseph-Arsenious Inaty

“Data fuels the modern economy, but at what ethical cost?” As demand for digital infrastructures skyrocket, giants like NEXTDC (ASX: NXT) position themselves as leaders in Australian innovation. In a bold move, NEXTDC issued a $1.5 billion sustainability- linked bond, pledging to develop ‘carbon-neutral’ data centres’; nevertheless, a closer look reveals that much of this “green” status comes from carbon offsets, rather than direct energy consumption reductions. Considering NEXTDC proudly claims to operate on 100% renewable energy but often consumes more electricity than entire cities, the moral fragility of “green financing tools” forces us to question: Are these bonds truly driving sustainability, or is this simply corporate greenwashing repackaged as ethical investment?

Sustainability-linked bonds (SLBs) are mechanisms employed to advance climate action (SDG 13) and industrial innovation (SDG 9) by incentivising companies to sustain energy-efficient quotas. However, when they are weakly enforced, self-determined, or reliant on renewable energy certificates (RECs) as opposed to tangible emissions cuts, we must quander whether SLBs genuinely instigate meaningful environmental change or simply reward companies for “symbolic gestures”.

NEXTDC’s commitment to ESG-performance is commendable in theory, yet contradictory in practice; their green credentials lean on market-based solutions rather than operational transformation. As data centres are projected to embody 4.5% of global electricity demand by 2030, the burden of ethical accountability intensifies – the onus on tech-sector incumbents. Offsets and indirect purchases may ‘tick boxes’, but don’t guarantee progress towards affordable and clean energy (SDG 7), nor do they ensure long-term alignment with Australia’s emissions targets. 

In this light, SLBs risk becoming instruments of reputational arbitrage. The ethical challenge is clear: How do we ensure corporate giants support measurable impact, not just marketable intentions? Should green bonds like NEXTDC’s shape the future of ethical investment, sustainability-linked finance must go beyond signalling intent – it must deliver verifiable, lasting change.

A Structural Contradiction in the Construction of Business Ethics

 

by Alina Han

The Australian community continues to have doubts about the ethical governance of large business groups - a crisis of confidence that stems not from a lack of transparency, but from a lack of substantive change. Despite frequent ethical guidelines issued by corporate boards and continuous strategic commitments made by management, in actual business decisions, ethical frameworks are often reduced to compliance documents, separated from resource allocation and risk assessment.

In a landmark event for the Energy industry in 2024, Origin Energy faced growing ESG (Environmental, Social and governance) controversy as it pursued its $18.7 billion merger and acquisition deal. Although the company systematically emphasizes its net-zero emissions roadmap to 2050 in its public statements, its capital expenditure structure toward gas exploration. The shareholder community is acutely aware of the significant disconnect between its strategic narrative and its operating practices: this not only weakens its credibility in the sustainability rating system, but also raises deep questions about the substance of its transformation strategy. Once positioned as a strategic measure to optimize the energy structure, the stress test revealed the nature of transitional risk mitigation tools.

This case reveals a structural contradiction in the construction of business ethics: When a company marginalizes ethical principles as ancillary issues, rather than deeply embedding them in the value creation model, it inevitably leads to a sustained depletion of stakeholder trust capital. Existing governance frameworks become rhetorical tools for crisis response rather than binding variables for strategy formulation. The public's apathy stems not from a lack of value orientation, but from the inertia of anticipating the failure of promises. Real organizational change cannot be achieved through rhetorical optimization in ESG reports, but depends on the ability of companies to construct credible decision-making mechanisms when short-term business interests conflict with long-term value propositions.

The Ritual of Ethics

by James Dwyer

By the early 2000’s, 81% of all Australian companies offered some form of training for their employees. Over the years, this has only increased - to the point it has become a common occurrence for every new starter in a major Australian institution to complete a series of often repetitive mandatory modules. The ideal of these trainings is to ensure all companies have ”[an] appropriate system of... internal controls”, to ensure employees abide by ethical standards and industry best-practice (AICD). Yet, how well does reality stack up with these guiding documents?

Consider the example of one of Australia’s oldest institutions, QANTAS, the ”Spirit of Australia”. During the early 2020’s, QANTAS faced a number of high-profile governance failures, including allegations of quid-pro-quo favours in order to secure market advantages. At the time public opinion turned strongly against the company. Yet despite this, QANTAS executed a change in leadership, apologising and promising to do right by customers. Soon, public opinion returned to 84% having a positive or neutral view of the company. This surprising neutrality is significantly indicative of our broader attitudes.

I contend that our neutral perception as a society of ethical corporate decision-making relates to our idea of certain rituals organisations perform to become ethical. If a company does wrong, it apologises. If you want to ensure good business ethics, make everyone complete a module. Society tells companies if they simply present cosmetic changes, they redeem themselves.

However, this thinking must be guarded against. SDG 16 calls for ”Strong Institutions” and this applies to businesses. Through holding companies accountable for substantial change to their institutional values - peering beyond the ritual - consumers can hope to improve business ethics in corporate decision making.

Ethical Decision-Making in Corporate Australia

by Manvi Saxena

Master of Commerce (Extension) student, Manvi Saxena is the winner of the 2025 Natoli Student Ethics Competition for a postgraduate student.

Despite extensive resources like ethical decision-making frameworks and guidance from bodies such as the Australian Institute of Company Directors, public perception of corporate ethics remains neutral. The big question is why does this persist?

High-profile scandals have left a lasting imprint on public trust. Cases such as the PwC tax scandal, Optus and Medibank data breaches, and Qantas' refusal to refund cancelled flights despite record profits exemplify what Roy Morgan terms "moral blindness" while prioritizing shareholder interests over community welfare. These incidents reinforce skepticism about whether companies genuinely embrace ethical principles or merely pay lip service to them.

While ethical frameworks exist, their implementation often falls short of public expectations. For instance, the Hayne Royal Commission exposed systemic misconduct in Australia's banking sector, eroding confidence in corporate governance. Ethical policies may be robust on paper but fail to translate into consistent actions that align with societal values.

Corporations frequently focus on financial performance over broader ethical outcomes. For example, Rio Tinto's destruction of Juukan Gorge highlighted a disconnect between profit-driven decisions and community or environmental stewardship. Such actions suggest that ethical considerations are secondary, fuelling public cynicism.

Transparency is essential for building trust, yet many organizations struggle with it. The Governance Institute’s findings show that sectors like banking and finance score poorly in perceived ethics due to opaque practices and insufficient accountability.

As one of Australia’s largest listed entities, Commonwealth Bank has faced criticism for its role in financial scandals revealed by the Royal Commission. Despite efforts to rebuild trust through ethical initiatives, public perception remains tepid due to past missteps and ongoing scrutiny.

To shift societal views, corporations must move beyond compliance to embed ethics into their core operations while demonstrating accountability, transparency, and genuine commitment to societal well-being.

Why Australians Remains Skeptical About Corporate Ethics - A Self-Reinforcing Cycle

by Austin Tran

Bachelor of Commerce student Austin Tran is the winner of the 2025 Natoli Student Ethics Competition for an undergraduate student.

From the public's perspective, corporate ethics increasingly resembles a branding tool rather than a true moral backbone. Companies are believed to sideline ethical conduct unless it is forecasted to increase profit. This belief is reinforced by high-profile cases of greenwashing in Australia, where companies secretly engage in unethical practices while branding themselves as sustainable.

A recent and striking example is Active Super, a superannuation fund that claimed to exclude investment in fossil fuels and gambling. Yet in 2024, after being caught investing in sectors that they proudly claimed to avoid, Active Super became the third entity in Australia to face court over greenwashing.

Worse still, organisations caught out for ethical misconduct frequently continue to operate with minimal consequence. This raises a difficult but necessary question: Are SDG frameworks truly working? When firms can selectively align with sustainability goals and face few repercussions for ethical failings, public scepticism is not just understandable, it’s inevitable.

That scepticism feeds into a self-reinforcing cycle. If ethical initiatives are viewed as hollow, they fail to generate trust or reputational benefit for firms. Without evident benefits, there would be little incentives for companies to move beyond surface-level commitments. 

Worse, some businesses have begun to practice “greenhushing” to avoid public backlash and accusations of greenwashing. In trying to avoid scrutiny, these firms have decided to speak less about their progress, and intentionally underreport their sustainability efforts. Greenwashing, alongside the rising prevalence of greenhushing, is making it even harder for the public to distinguish between genuine and performative businesses. And so, the cycle of public distrust and corporate performativity continues.

Breaking this loop requires more than better frameworks, it demands stronger enforcement and transparency. Until then, Australians are likely to remain on the fence, not because they don’t care, but because they’ve seen this all before.

2025 Student Ethics Prize Details Announced

 

Net zero by 2050 for Qantas

by Natasha Wensley

 

In pursuit of United Nation SDG 12, Australian airline Qantas committed to net zero emissions by 2050. While their broader sustainable development plan has included notable US$200M investments in sustainable aviation fuels, the implementation of a carbon offset program, a fleet enhancement program, and improved waste reduction, sceptics continue to criticise the airline's role in the global climate crisis.  

 

The underlying understanding that companies exist to maximise shareholders wealth is the most damaging argument to companies claim of sustainable production. Research does exist to support the proposition that companies associated with claims of ESG have been experiencing disproportionate growth 1.7 percentage points above their competitors, perhaps incentivising investment in these programs. However, the Board of major ASX listed entities have proven slow to implement real change, often being called out for “greenwashing” with “vague and unqualified claims” supported by a “lack of substantiating information”. 

 

Such distrust is perpetuated by the media. Extensive media coverage of the dramatic $2.5million fine received by Coles in 2023 need not have involved every sustainable claiming company to have directly affected their public perception – if Coles’ claims to sustainable production cannot be trusted then why should that of any other company? As such, this ongoing media scrutiny continues to impact the public's trust in Qantas’ sustainable practices. Publications contained in both the AFR and Guardian encourage readers to question whether their sustainability programs, notably the third-party led carbon credit scheme, are being executed with sufficient due diligence. 

 

The ethical decision making frameworks and guidance provided by the Australian Institute of Company Directors may be comprehensive but the publication of these reports means little to the Australian people. The tension between the publications and the distrust they represent creates the neutrality around ethical practices that is represented in the Australian public today.