Price Check on Australia's Corporate Ethics

by Austin Tran

Australian companies invest heavily in the language of ethics, with sustainability reports becoming as standard as the annual report itself. Yet public trust remains stubbornly mixed, and recent events suggest that the problem runs deeper than individual misconduct. This gap persists because companies have learned to perform ethics rather than practise it, and the systems meant to see through it are themselves compromised.

Behind the slogans ‘Caring for All Australians’ and ‘Better Together’, Woolworths and Coles position themselves as companies with a purpose beyond profit. Together, they command around 65% of the domestic market. However, their alleged conduct tells a completely different story. In September 2024, the ACCC launched Federal Court proceedings against both giants, alleging they inflated baseline prices before placing products on promotional programs, making the advertised discounts entirely illusory. If the allegations are upheld, this represents a direct assault on UN SDG 1 (‘No Poverty’), with both companies deliberately extracting more from consumers that are already buckling under record cost-of-living pressures. 

And yet the systems meant to catch this are in no better shape. Corporate accountability depends on independent assurance providers to confirm whether ethical claims reflect reality. Even in analogous contexts, verification has proven fallible: Deloitte recently submitted a report containing AI-generated hallucinations and fabricated legal citations. If the institutions paid to verify ethical claims cannot themselves be trusted, then no framework can close the gap between what companies say and what stakeholders actually experience.

Australian governance already has the frameworks. What remains unanswered is whether those responsible for upholding them have any reason to act on them. Both failures share a common root: executives are rewarded for the appearance of integrity, not its substance. Until remuneration is explicitly tied to ethical outcomes, no framework, however well-designed, will be able to override that calculus.

Compliance is Not Conscience: Lessons from Rio Tinto’s Ethical Failure

by Juliette Gao

While Rio Tinto publicly aligns its operations with SDG 16: Peace, Justice and Strong Institutions, the destruction of Juukan Gorge remains a stark reminder of the gap between corporate commitments and real-world outcomes. Despite holding legal permits, the decision to prioritize mineral extraction over irreplaceable cultural heritage exposed a fundamental flaw: the company’s internal governance prioritized regulatory compliance over ethical stewardship.

The root of this ‘ethical bankruptcy’ lies in prioritizing short-term production targets over meaningful stakeholder consultation. When board oversight is decoupled from social impact, companies inevitably lose their social license to operate.

To bridge this gap, boards must mandate an ‘Independent Social & Cultural Audit’ for all major projects, ensuring that community voices carry genuine weight in decision-making. Furthermore, linking executive variable compensation to ‘social impact targets’—rather than purely operational output—would bake integrity into the corporate DNA. Real-world ethics must be integrated into project design, not merely polished in annual sustainability reports.

Corporate sustainability is not a checkbox exercise; it is the courage to prioritize human heritage over mineral yield. True trust is forged in respectful partnership, not harvested through the exploitation of regulatory loopholes.

The Shadow Values Saga: Why Corporate Ethics Fail Under Pressure

by Victoria Marsh

Corporate Australia is well-versed in the language of ethics. Nowadays, adhering to ESG frameworks and aligning with the UN Sustainable Development Goals (SDGs) are essential indicators of what it means to be a “responsible” business. Yet public trust remains mixed. Corporate leaders face constantly scrutiny and rising ethical expectations while internally the focus shifts to delivering profits, satisfying shareholders and sustaining growth.  

‘Shadow Values’ emerge from this tension - unspoken priorities that ultimately shape decisions when ethical commitments and commercial realities collide. 

Few cases reveal this more clearly than Star Entertainment Group. In its 2020 sustainability and ethics report, Star aligned itself with SDG 16 (Peace, Justice and Strong Institutions), emphasising anti-corruption, transparency and accountable management. Yet investigations reported by the Sydney Morning Herald exposed serious anti-money laundering failures, with $900 million in illicit funds flowing through its casinos despite repeated warnings. This was not a lack of ethical awareness, but a reflection of shadow values overriding stated commitments.

Organisational environments can normalise ethically questionable decisions when they align with performance pressures. Over time, what appears unethical externally can become internally rational.

Addressing this gap requires a reconsideration of how incentives are structured. As long as ethical behaviour remains the more costly option, it is unlikely to ever prevail in practice. Boards have a critical role in shaping decision-making conditions – through linking renumeration to compliance outcomes, strengthening independent oversight or embedding ethics into everyday operations rather than reporting frameworks.

Ethical credibility is not simply a function of how extensively commitments are articulated, but of whether they can endure when placed under commercial pressure. If the underlying pressures that give rise to shadow values remain unchanged, ethical conduct risks will continue to be acknowledged in principle but negotiable in practice.

The High Cost of ASX Stewardship Failure

by Belindha Ardhani

If trust is the most valuable currency in capital markets, why did the ASX choose to pay for its technological failures with the systematic deception of the public? Known as the steward of Australia’s financial infrastructure, the ASX’s betrayal of this role was laid bare in the April 2026 ASIC Final Report. The findings exposed a critical say-do gap that represented a chasm between the board’s optimistic public promises and the internal decay of the CHESS replacement project.

This deception is a direct violation of SDG 16, which mandates the development of effective, accountable, and transparent institutions. While profit-seeking is standard, it becomes unethical for a monopoly like the ASX, which holds a unique responsibility to maintain the nation's financial plumbing. By prioritizing short-term dividends over infrastructure resilience, the ASX externalized its risks by pocketing immediate savings while forcing the entire Australian economy to bear the potential cost of a systemic collapse. 

The evidence is damning, with internal memos flagging the project as 'Red' even as public reports remained 'Green'. The subsequent AUD 250 million write-off served as a mathematical admission of this failure. This ethical collapse stemmed from a commercial conflict of interest, as institutional silence suppressed technical warnings to prioritize executive incentives over integrity.

To rectify this structural flaw, the ASX must adopt international benchmarks, such as establishing an independent regulator mirroring Singapore’s SGX RegCo to firewall regulation from profit, and treating infrastructure as a stable public utility similar to the Swiss SIX model. These reforms are essential to decouple market safety from shareholder pressure and ensure technical integrity. 

Ultimately, the ASX must act as a trusted guardian, not a profit-maximizing corporation. The board must now choose: conceal itself behind the say-do gap, or confront it through the transparency required to honour its social contract.

The Gap Between Sustainability Commitments and Reality at Qantas.

by Beatrice Vu

Many businesses make strong sustainability claims to build trust, but a gap often exists between what they say and what they truly do. Qantas Airways is an example.

They publicly commit to achieving net zero emissions by 2050 and highlight investments in sustainable aviation fuel (SAF), fleet efficiency and carbon offset programs, aligning these initiatives with the SDG 13. (Sustainability Report, 2025). However, aviation remains a sector where emissions are difficult to cut as it still heavily depends on fossil fuels in reality. SAF is still far from being available at scale and Qantas’ own climate disclosures show that most of the emissions reductions in the short term are expected to come from carbon offsetting rather than operational change (Qantas News Room, 2022). Critics argue that this approach can make progress look stronger than it actually is. In 2024, Climate Integrity lodged complaints with the ACCC, claiming that their fly carbon neutral and net zero statements may be misleading (ABC News, 2024). Qantas also reports substantial Scope 3 emissions, which exceed its direct emissions, but these indirect impacts are rarely highlighted in public sustainability messaging (Sustainability Report, 2025). This gap reflects a broader challenge, which sustainability goals often collide with commercial pressures in a competitive industry where rapid emissions reductions can increase costs.

To narrow this gap, boards can link ESG goals directly to executive pay and major investment decisions, so climate commitments actually influence how leaders are rewarded (Qantas News Room, 2022). Increasing transparency around Scope 3 emissions and having key sustainability claims independently checked would also help rebuild trust. Finally, instead of relying heavily on offsets, directing more funding toward technologies that genuinely cut emissions would show that sustainability is a commitment in the long term, not just only a marketing message.

BHP and the Governance Paradox of Climate Commitments and Scope 3 Emissions

By Danno Sano

Many Australian listed companies publicly promote ethical values, ESG commitments, and corporate purpose. Yet stakeholder trust remains uneven. The gap often arises not from insincerity, but from governance systems that structurally prioritise short-term financial performance over long-term sustainability outcomes, creating tension between stated values and operational reality. 

BHP illustrates this tension in relation to SDG 13 (Climate Action). The company has committed to achieving net zero operational emissions (Scope 1 and 2) by 2050 and highlights climate action within its sustainability disclosures. However, the majority of BHP’s total emissions stem from Scope 3, particularly from the downstream use of iron ore and metallurgical coal in global steel production. Although BHP invests in decarbonisation partnerships and low-emissions technologies, continued reliance on commodities that enable carbon-intensive industries exposes a structural contradiction. Climate ambition coexists with revenue models tied to emissions-heavy value chains. As a result, ethical commitments risk appearing aspirational rather than transformative.

The persistence of this gap reflects governance design. Executive remuneration and capital allocation decisions remain predominantly anchored in earnings growth, production targets, and return on investment. Even where sustainability metrics are incorporated, they may lack material weighting or enforcement mechanisms capable of influencing high-stakes strategic choices. Without structural alignment, ESG commitments function as disclosures rather than decision rules.

To close the gap, boards should embed measurable Scope 3 reduction trajectories within executive compensation frameworks, link capital expenditure approvals to climate scenario analysis, and require independent assurance of transition plans. Transparent disclosure of trade-offs between growth strategies and emissions pathways would further strengthen accountability. A board-level sustainability committee with authority over major investment decisions would institutionalise ethical oversight. 

Ethical leadership is not proven through public commitments, but through governance structures that align incentives with long-term societal and environmental impact.

 

Not Hypocrisy: Why the Ethical Gap Is a Feature, Not a Failure

 by Josh Fisher

In 2021, ANZ published a human rights commitment explicitly endorsing the principle of free, prior and informed consent for Indigenous communities. That same year, it participated in a $1.5 billion loan to Santos for the Barossa gas project in the Timor Sea, while a Federal Court case brought by Tiwi Islands Traditional Owners was actively underway alleging Santos had never properly consulted them at all.

This is not hypocrisy. It is something more instructive.

UN Sustainable Development Goal 10 calls for equal opportunity and reduced inequalities regardless of origin. The communities most exposed to the Barossa project’s risks - the Tiwi and Larrakia peoples, whose sea country, food sources and songlines sit in the project’s path - had no seat at the table where the capital decision was made. ANZ’s human rights policy acknowledged their rights in principle. Its credit committee proceeded regardless.

The gap is not between intention and execution. It is between two different legal systems. Under Section 181 of the Corporations Act, ANZ’s directors owe duties to shareholders. A commitment to free, prior and informed consent carries no equivalent legal weight. When the two conflict, the outcome is predictable: the enforceable obligation wins.

This is why governance reforms alone are insufficient. Australia’s 2024 mandatory climate disclosure laws have already broken with the orthodoxy that corporate law concerns only financial returns. The next step is already being proposed: RMIT legal scholars have called for human rights due diligence to be embedded directly in the Corporations Act, following France and Germany, imposing an enforceable duty on directors to identify and address human rights risks in their operations and supply chains.

Until that happens, the distance between what companies declare and what communities experience will not be a governance failure. It will be a feature.