A new parliamentary term in Canberra for a re-elected government with a huge majority is a timely opportunity for long-term policy and regulatory reform. One necessary focus is the ecosystem for business success in society under 21st century conditions, in an age of existential threats.

Australia’s contribution to meeting intertwined local and global challenges requires co-ordinated and scaled-up action across the public, private, community, and university sectors. Climate harm, geopolitical conflicts, civil society breakdowns, market collapses, entrenched poverty and inequality, mass epidemics, cybersecurity attacks, nuclear and biological warfare and terrorism, and artificial intelligence threats all loom as global existential threats. Few of them can be solved without significant business engagement.

The Albanese Government should therefore spend some of its considerable political capital on rethinking the conditions for contemporary business success, and its global and national drivers and inhibitors. The basic question is: Do we have the necessary intellectual, policy, and regulatory architecture within and beyond government fully developed, seamlessly integrated, and adequately resourced yet?

Designing, developing and co-ordinating such architecture across levels of government and industries requires long-range thinking and action. Periodic calls to revive the discarded Corporations and Markets Advisory Committee highlight the need for specialist expertise in advising governments on business and market regulatory reform. Any new CAMAC-like body needs a broader mandate, expertise, and membership, in the face of the rapidly changing global and Australian environments for business.

The need for better policy and regulatory architecture on business extends beyond what emerges from the upcoming Economic Reform Roundtable. Everything at the Roundtable ultimately rests upon underlying and often diverging worldviews about business success and regulation in meeting society’s needs.

The Albanese Government faces multiple and broader reform challenges involving business, from mandating climate disclosures, transitioning to renewable energy, and simplifying corporate and financial services laws, to banning unfair trade practices, eradicating modern slavery in supply chains, and protecting children from social media harm. As Prime Minister Albanese recently reiterated, “social media has a social licence”. Corporate responsibility, governance, and sustainability are implicated in all of those broader aspects of business regulatory reform, and many Roundtable issues too.

We can all agree that policies and laws should be culled if they unduly delay and obstruct business while failing to ensure adequate market, social, and environmental protection. Yet deciding how much red and green tape is too much or too little for each of business, the economy, and the community presupposes a defensible view of the features and limits of good and bad business regulation, and hence the role of business in addressing societal needs.

At present, we lack a coherent and overarching national narrative on corporate responsibility, governance, and sustainability to inform public dialogue, policy development, and regulatory reform. Political and media debate is stuck between fixed and polarised positions about corporate social responsibility (CSR), and the related topics of incorporating environmental, social, and governance considerations (ESG), and promoting diversity, equity, and inclusion initiatives (DEI).

CSR, ESG, and DEI are now essential issues for business, as well as issues for universities and the professions that engage business.

Increasingly, they are mainstream concerns of corporate law and governance too. Topical examples include the liability of company directors for mismanaging climate risks and disclosures, the relationship between ESG and the responsibilities of superannuation funds and managers, regulatory action on greenwashing (on environmental claims) and bluewashing (on CSR and ESG claims), and controversies over the scope and content of corporate governance standards.

Corporate governance standard-setting by the ASX Corporate Governance Council is a controversial battleground over CSR, ESG, and DEI. However, the ASX CGC’s to-ing and fro-ing in successive reform proposals on a social licence to operate for business, corporate purpose, DEI targets, and stakeholder engagement has generated considerable criticism and pushback. In failing to satisfy ESG and DEI supporters and sceptics alike with its reform proposals and backdowns, the ASX CGC’s actions have fuelled calls for its own reform or abolition.

CSR, ESG, and DEI have geopolitical dimensions too. The second Trump Administration’s stated public position is to end the Paris Agreement, Biden-era green energy initiatives, and what Trump calls unlawful and unethical DEI wokeness in the US government, business, and university sectors, with knock-on effects for Australia.

This month’s landmark ruling by the International Court of Justice on potential liability under international law for countries who contribute to climate harm has immediate and significant implications for Australia as a major carbon emitter. It also has CSR, ESG, and business regulatory implications that equally should be occupying the minds of governmental and energy industry lawyers alike.

Australia’s defence against any lawsuits by climate-impacted neighbouring countries requires what the ICJ calls ‘regulatory due diligence’, which puts the spotlight on Australia’s business regulation, especially in the energy sector. The Roundtable must take account of that development too.

Any pushback by the Nationals and Liberals on net zero emissions policy needs to read the room, or else risk falling on the wrong side of history, science, and now law. The ICJ ruling offers a potential political wedge. In the ICJ’s own words: ‘Failure of a state to take appropriate action to protect the climate system from GHG emissions - including through fossil fuel production, fossil fuel consumption, the granting of fossil fuel expiration licences or the provision of fossil fuel subsidies - may constitute an internationally wrongful act which is attributable to that State.’

The ICJ ruling does not automatically mean that recent Federal Court rulings against governmental liability in negligence for climate harms are wrong. However, it supplies another basis for challenging those rulings in future test cases.

The future direction of Australian business-related policy and regulation is shaped by political, economic, social, legal, environmental, and international interdependencies that are stronger than ever. They underlie and shape suitable policy and regulatory options, including outcomes of the Roundtable. Clear and holistic thinking about corporate responsibility, governance, and sustainability will be key.

Professor Bryan Horrigan will discuss his recent essay, _Corporate Social Responsibility in an Age of Existential Threats_ (Monash University Publishing), this Wednesday, 6 August, at ANU Meet the Author.

The views expressed in this article may or may not reflect those of Pearls and Irritations.