RMIT Online report finds most Australian businesses expect climate costs, but few are ready

 A new report by RMIT Online and Deloitte Access Economics reveals that while most Australian businesses fear climate change's financial impact, they are unprepared for complex new sustainability reporting requirements and the associated non-compliance risks, including penalties of up to $750,000.

The findings coincide with the announcement of RMIT's Regenerative Futures Institute launch, in 2026, to address complex sustainability challenges through interdisciplinary research, education, and partnerships focused on regenerative practices and sustainability innovation.

The data highlights that 56% of businesses are concerned about climate change's financial impact within the next decade. These fears are well-founded, with projections indicating a $423 billion plummet in Australia's economic output in a four-degree-hotter scenario due to high temperatures affecting labour productivity. Despite this, and alongside mandatory climate reporting laws taking effect this year, 43% of large Australian businesses admit they lack the necessary skills and knowledge to adapt.

The Climate and Sustainability report indicates a lack of basic systems for tracking carbon emissions or conducting environmental audits. Few businesses are investing in the necessary capability uplift for financial and executive teams.

Compounding this unpreparedness is a severe green skills shortage. Half of the surveyed businesses (50%) are struggling to find talent equipped for future challenges. The most critical gaps are in engineering, science and technical domains (32%), followed closely by a deficiency in climate and sustainability-focused soft skills (29%). 

This skills gap is set against a backdrop of rapidly accelerating demand for green expertise, projected to double by 2050. Modelling for the report suggests that medium and large Australian businesses will need more than one million more green workers in newly created and evolving roles by 2030.

The Regenerative Futures Institute will focus on addressing these issues. Its education program will upskill and enhance capability in critical areas, with short courses focused on Regenerative Business Models and Regenerative Values Systems through to Design for a Circular Economy and Social Equity and Regeneration.

We're at a tipping point. Many businesses know climate change will hit their bottom line, but they aren't ready for what's coming 

- Chris Speed, Director, Regenerative Futures Institute, RMIT.

 "Green skills are quickly becoming vital for businesses, and addressing this skills gap is crucial for Australia's economic resilience. Our intensive short courses are uniquely designed to respond to this environment, equipping businesses with the necessary tools to navigate and thrive in a rapidly changing world." 

Green skills will reshape Australia's workforce by boosting demand in green sectors, requiring upskilling in existing roles (from accountants to procurement specialists) and creating new green jobs (like carbon capture specialists).

"Our data indicates that Australian businesses face substantial financial risks if we fail to close the green skills gap. This could constrain future growth and put pressure on critical industries, making decisive and coordinated action from government and businesses essential," said Rhiannon Yetsenga, Associate Director at Deloitte Access Economics.  

Regulation also puts pressure on the market and stresses the need to address the skill gap. This year, large companies and financial institutions are required to comply with sustainability reporting under the Corporations Act 2001, including disclosing climate-related financial risks and opportunities, assessing and disclosing climate risks and outlining strategies for emissions reduction.

"These new requirements are another source of pressure for companies to ensure they have the skills needed to deal with the impact of climate events," said Nic Cola, CEO of RMIT Online. "Our report shows many companies are unprepared and that green skills are quickly becoming core for businesses. The creation of the Regenerative Futures Institute is an important contribution to solving this challenge." 

To enhance resilience and mitigate losses, the report urges businesses to prioritise sustainability goals, reskill their workforce, map skills gaps, and prepare for climate reporting. 

Impact of climate change on business:

• Traditional industries (e.g., agriculture, mining) are highly vulnerable, 74% acknowledge threats from extreme weather.

• Professional industries are also at risk, and 60% foresee significant financial risks from climate change within the decade.

Skills shortages:

• Skills shortages will impact all business levels, including leadership (28%), management (30%) and operations (42%).

• Barriers to upskilling include high costs (61%), insufficient time (55%) and lack of resources (47%). 

Business awareness and action

• Sustainability is a growing priority, as 72% of businesses see it as more important than 5 years ago.