Welcome to 2026 | A Letter to Executives on Sustainability, Strategy and What Comes Next
As we step into 2026, many Boards and Executive teams are taking a moment to pause, reflect and reset. Over the past few years, sustainability and climate-related disclosure has moved from emerging issue to operational priority, and now, increasingly, to a core consideration in governance, risk and strategy.
If there is one defining shift I have observed across organisations over the past twelve months, it is this: sustainability is no longer something leaders are preparing for. It is something they are now being judged on.
In October, we explored how organisations are moving from awareness into operational readiness for mandatory climate disclosure. In November, we examined what happens when those disclosures are tested through assurance, scrutiny and expectations of defensibility. As we enter 2026, the question becomes more strategic and more consequential.
What do leaders do with this capability once it exists?
2026 is the year sustainability information starts to carry weight
For many organisations, the early years of sustainability reporting were characterised by first disclosures, learning curves and, to some extent, goodwill. Stakeholders understood that systems were immature and that approaches would evolve.
That period is ending.
In 2026, sustainability and climate disclosures will increasingly be compared year-on-year, across peers and across industries. Assumptions will be examined. Changes in methodology will attract attention. Inconsistencies between sustainability reports, annual reports, investor materials and public statements will be more visible.
This is not about perfection. It is about credibility.
Climate-related financial disclosures under AASB S2, aligned with IFRS S2, are designed to inform assessments of enterprise value. They sit alongside financial statements for a reason. They are intended to influence how risk, opportunity and long-term resilience are understood.
For Boards and Executives, this marks a shift. Sustainability information is no longer peripheral. It is becoming decision-critical.
From reporting obligation to decision infrastructure
One of the most important mindset shifts leaders can make in 2026 is to stop viewing sustainability reporting as an obligation and start treating it as infrastructure.
When sustainability data is reliable, well-governed and integrated, it becomes a powerful input into decision-making. It informs capital allocation, asset strategy, risk prioritisation and long-term planning. When it is fragmented or poorly controlled, it becomes a source of uncertainty and exposure.
In organisations where sustainability information remains siloed, leaders often find themselves questioning its usefulness. In organisations where it is integrated into governance and planning processes, it increasingly shapes decisions before they are made.
This distinction matters in 2026. Regulatory scrutiny is rising, but so too are commercial expectations. Investors, lenders, insurers and government counterparts are paying closer attention to how organisations understand and manage sustainability-related risk.
The organisations that will move with confidence this year are those that treat sustainability information with the same seriousness as financial information.
Climate risk is now firmly a leadership issue
Another shift that will define 2026 is the continued reframing of climate risk as a financial and strategic risk, not a reputational one.
Physical risks, such as extreme weather events, are already affecting operations, supply chains and insurance costs. Transition risks, including regulatory change, market shifts and technology evolution, are influencing asset values, project viability and customer expectations.
Standards such as AASB S2 and IFRS S2 reinforce this framing by explicitly linking climate-related risks and opportunities to cash flows, access to finance and cost of capital. This places climate risk squarely within the remit of Boards and Executive teams.
For leaders, this does not require deep technical expertise. It does require informed oversight, clear accountability and the willingness to ask the right questions. How does climate risk affect our strategy? Where does it change our assumptions? How confident are we in the information we are using to make decisions?
In 2026, organisations that continue to treat climate risk as a specialist sustainability issue will increasingly find themselves out of step with regulatory and market expectations.
The quiet differentiator: systems, data and integration
If there is one area where I see a clear divide emerging between organisations, it is in the maturity of their underlying systems and data.
Many organisations are still relying heavily on spreadsheets, manual processes and disconnected tools to manage sustainability information. While this may have been workable in earlier years, it does not scale well in an environment of increasing scrutiny and assurance.
In contrast, organisations that have invested in fit-for-purpose sustainability data systems and clear governance structures are finding that reporting becomes more efficient, assurance becomes less disruptive, and leadership confidence increases.
This is not about technology for its own sake. It is about building foundations that support consistency, transparency and trust. In 2026, these foundations will increasingly separate organisations that are reacting to sustainability requirements from those that are using them strategically.
Governance and accountability will continue to sharpen
As sustainability reporting matures, governance expectations will continue to sharpen. Audit Committees are increasingly involved in overseeing climate and sustainability disclosures. Directors are expected to understand, at a high level, what is being disclosed and why.
This does not mean Boards must become sustainability experts. It does mean they must be comfortable with oversight, challenge and accountability.
In 2026, I expect to see greater focus on consistency across disclosures, clearer articulation of roles and responsibilities, and stronger integration between sustainability, finance and risk functions. Organisations that have already clarified accountability and embedded sustainability into governance processes will find this transition far smoother.
Those that have not may experience increased friction as expectations rise.
What good looks like by the end of 2026
Looking ahead, the organisations that will be viewed as leaders by the end of 2026 are unlikely to be those with the most ambitious statements. They will be those with the most coherent and credible approaches.
In practice, this means sustainability considerations are embedded into strategic planning cycles rather than addressed after decisions are made. Climate risk is considered alongside other strategic and financial risks. Data systems support confidence rather than caveats. Reporting is consistent, defensible and aligned with how the organisation actually operates.
Importantly, these organisations will not be spending disproportionate time reacting to new requirements. They will have invested early in capability, allowing leadership to focus on strategy rather than remediation.
A final reflection as we enter the year ahead
If there is one message I would leave with Boards and Executives as we enter 2026, it is this: sustainability is no longer about doing more. It is about doing it well.
The work undertaken over the past few years has laid important foundations. The year ahead is about using those foundations to support better decisions, manage risk more effectively and build long-term resilience.
If you are reflecting on how your organisation is positioned for what comes next, these are the conversations worth having early in the year. They are not always easy, but they are increasingly essential.
I look forward to continuing the conversation as 2026 unfolds.
— Rebecah Ettridge
Managing Director at Naturaliste Solutions