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.

The Promise and the Practice: Woolworths and the Ethics of SDG 12

by Shubham Bansal

Master of Commerce (Extension) student Shubham Bansal is the winner of the 2026 Natoli Student Ethics Competition for an postgraduate student.

Woolworths Group (ASX: WOW) built its public identity around UN SDG 12, responsible consumption and production. Its Sustainability Plan 2025 pledged to eliminate single-use plastics and achieve fully recyclable own-brand packaging, earning ESG recognition and projecting a company in step with community values.

Yet in 2024, the ACCC took Woolworths to court alleging it artificially inflated prices before applying "discounts", deceiving consumers mid-crisis. The Governance Institute's Ethics Index 2024 found Australians rated supermarket pricing as the most unethical business behaviour. A company earning sustainability plaudits while allegedly misleading its customers is not acting ethically, it is managing its reputation selectively.

SDG 12 is not only about packaging. It encompasses responsible business conduct and consumer rights to accurate information. Yet the UN SDG Progress Report 2024 confirms only 17% of SDG targets are on track globally, partly because corporate commitments routinely outpace conduct. Woolworths illustrates exactly this dynamic.

The gap is structurally incentivised. Sustainability pledges are voluntary, self-measured, and rewarded by markets before verification. Misconduct surfaces only after regulatory action, sometimes years later. The ASX Corporate Governance Principles call on boards to instil ethical conduct across all functions. In practice, pricing strategy and consumer communications must face the same scrutiny as environmental targets. Australia's mandatory sustainability reporting regime, effective from January 2025, shows regulators recognise that voluntary disclosure is insufficient. The ACCC's enforcement action against supermarket pricing signals the same reckoning is coming for consumer conduct.

Woolworths has the scale to lead. The question is whether its ethical commitments govern every business decision or only the pages of the annual report designed to impress.

Corporate Sustainability: Why Ethics Break Down in Practice

by Amy Koss

Bachelor of Commerce and Bachelor of Advanced Studies student Amy Koss is the winner of the 2026 Natoli Student Ethics Competition for an undergraduate student.

 

As a student studying sustainability, I find it telling that corporate ethics is so often met with one cynical response: greenwashing. Australian companies regularly promote ethical values, ESG commitments and corporate purpose, yet public trust remains mixed. Why?

The answer is not that companies lack ethical frameworks. It is that those frameworks often fail to surface in day-to-day commercial decisions, reducing sustainability to a communications exercise rather than a strategic priority.

Qantas provides a clear example. The company publicly promotes sustainability initiatives, including its “Fly Carbon Neutral” program and a pathway to net zero, aligning itself with United Nations Sustainable Development Goal 12 (Responsible Consumption and Production). However, these claims have been challenged by climate advocacy groups, who argue that such messaging risks underrepresenting the environmental impact of flying and relies heavily on carbon offsets rather than fundamental emissions reduction. This creates a disconnect between how sustainability is presented and the underlying environmental reality, weakening public trust in whether corporate climate commitments reflect genuine change or carefully managed branding.

This gap is not accidental. It reflects how organisations are actually run. Incentives remain heavily tied to financial outcomes, while ethical commitments are often measured through reporting rather than lived behaviour. Under pressure, decisions often prioritise short-term financial value over long-term business sustainability, particularly when environmental trade-offs are difficult to quantify.

Closing this gap requires boards and leaders to embed ethics into the mechanics of decision-making. This includes linking executive incentives to customer and stakeholder outcomes, requiring ethical impact to be internally and externally monitored alongside commercial trade-offs, and ensuring that sustainability claims are grounded in verifiable action rather than aspiration.

Until ethics is built into how decisions are made, not just how they are described, the gap between what companies say and what stakeholders experience will persist.

2026 Student Ethics Prize Details Announced

 

The Natoli Student Ethics Prize, supported by the Business Ethics Collaborative within the Beta Gamma Sigma Honour Society, invites students to reflect on contemporary ethical challenges in business and society. The competition showcases student perspectives on ethics, governance, and responsible business practice.

Further details are available on the Business Ethics Collaborative website.