“Whilst increased investment is a good sign, how Australian companies are managing ESG risks remains a concern. Over half either manage risks imposed by ESG and sustainability developments reactively or not at all. UK and US markets are more advanced in their appreciation of ESG risks and the importance of businesses measuring and reporting their performance against those risks.”

- Renee Law, Strategic Communications

The pandemic has put organisational resilience and crisis management at front-of-mind for global businesses leaders, pushing them to re-evaluate business models and invest in crisis preparedness

Key Findings

Government Aid

  • 84% of Australian businesses have received government aid during the pandemic, slightly higher than the 82% global average

Business Models

  • 66% are struggling to digitalise their business

Uneven impact

  • 67% of G20 companies in the infrastructure industry have seen a reduction in their turnover – the highest figure of any surveyed industry

ESG has clearly become a higher priority for corporate Australia as it continues to face increased pressure from media, the public, and government and regulators

Key Findings

  • 30% expect to be scrutinised by the media for their sustainability and environmental impacts
  • 30% think they are ‘falling short’ on ESG reporting and performance, compared to 20% in the UK and 22% in the US

  • 97% have increased their commitment to ESG

Amid a shifting investigatory landscape, increased media scrutiny and a new group - litigation culture, disputes and litigation risks have become a growing area of C-suite concern.

Key Findings

Investigations

85% of Australian businesses are being or expect to be investigated in next 12 months, with the top three areas being:

  • Business Conduct and Treatment of Customers, (39%)
  • Relationship with Public Bodies or Procurement of Government Contracts (35%)
  • Sustainability/ESG Practices (34%)

Disputes and class actions

  • 17% of Australian business leaders said they had experienced a class action in the past 12 months

  • 16% are expecting this to continue in the next 12 months

Cyber risks are more complex, and attacks are more frequent as the attack surface continues to expand. With organisations increasingly relying on digital technologies, managing cybersecurity has never been more crucial

Key Findings

Cybersecurity

  • 77% of Australian organisations suffered a cyber attack in the past 12 months
  • 47% have been negatively impacted by phishing/social engineering over past 12 months, compared to 34% global average

Data Privacy

  • 38% of Australian organisations experienced a loss of customer/patient data
  • A further 27% reported a loss of third-party information

September 2021 Resilience Barometer®

The latest Resilience Barometer® data reveals that socio-economic fault lines exposed by COVID-19 are creating an unforgiving marketplace. Economic disruption, government support schemes, social change and climate crisis are driving relentless scrutiny of companies from governments and the public, with little room to avoid disputes and investigations into business practices and behaviour.

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“Clearly, ESG has become a higher priority for corporate Australia as it continues to face increased pressure from media, the public, and government and regulators. However, COVID-19 has pushed other key areas of concern up the corporate agenda— employee wellbeing, talent shortages, treatment of customers, class actions and commercial disputes, financial crime and cybersecurity, and businesses are responding to protect value and build resilience as they look towards future growth.”

Mark Dewar, Australia Practice Leader
 

“Australian business leaders admit they are more reactive to managing the risk of fraudulent practices or financial misstatements within their business. With the anticipated Combatting Corporate Crime legislative amendments around the corner, Australian boardrooms will face greater regulatory risk and potential scrutiny. A sharper focus on prioritising resources, to ensure robust compliance programs are in place, will be key in the next 12 months.”

Mark Pulvirenti, Forensic & Litigation Consulting

INSIGHTS

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Wage Theft: Addressing Employee Underpayments in Australia

Over the past 18 months, there have been moves by some Australian states to criminalise ‘wage theft’. Several high-profile cases involving major Australian organisations have placed a spotlight on employee underpayments, which are investigated by the Fair Work Ombudsman.

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Australian Companies Are Falling Short on ESG Reporting

Corporate Australia has become very fluent in discussing the key elements of environmental, social and governance issues, but companies around the world are doing more as they tackle climate change and the global economy moves away from fossil fuels. Australian directors are falling behind their global counterparts in the ESG space. 

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The Mainstreaming of ESG Investing in the Decisive Decade for Climate: An FTI Consulting Report September 2021

September 1, 2021—Global institutional investors are doubling down on ESG as policymakers and regulators strengthen disclosure requirements according to new research from FTI Consulting.

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Is Your Business Ready for the Coming Decade of Data? - FTI Journal

July 15, 2021—Organizations that harness the wave of post-pandemic data will emerge stronger, according to the 2021 FTI Consulting Resilience Barometer.  The impact of the pandemic on world commerce and society has yet to play through. However, it is clear that the pandemic has transformed how we work, learn, consume and communicate.

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Addressing Third-Party Cyber Risk: Moving Beyond a False Sense of Security

June, 2021—In today’s corporate environment, it is commonplace to outsource business operations functions to third-party suppliers for increased efficiency and to optimize internal resources. However, the added outsourcing benefits also carry significant cyber risk, as these connected entities can serve as an access point for cyber actors.

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