We’re nearly a quarter of the way through 2026, and it feels like a good moment to take stock of where purpose-driven business sits in Australia. The landscape has shifted significantly over the past few years, and some of those shifts have been more meaningful than others.

Here’s my assessment.

What’s genuinely improved

Mandatory reporting is real. The most significant structural change is that mandatory climate-related financial disclosure is now law. Group 1 entities are already reporting. Group 2 and 3 entities are preparing. This is not a voluntary initiative that companies can opt into when it’s convenient. It’s a legal obligation, and it’s changing corporate behaviour.

The quality of early reports varies enormously, but the direction is clear: environmental transparency is no longer optional for large Australian businesses. This is progress.

Impact investing infrastructure has matured. The ecosystem of impact funds, intermediaries, and advisory services has grown substantially. Australian investors have more options for impact investing than at any point in history. The sector is still small relative to the total investment market, but the infrastructure to scale it now exists.

Social procurement is becoming normalised. The combination of state government social procurement frameworks and corporate RAP commitments has created real demand for social enterprises and Indigenous businesses. Procurement isn’t going to solve social disadvantage on its own, but it’s directing meaningful economic resources toward organisations with social missions.

Community energy and circular economy are growing. Community-owned renewable energy projects and circular economy business models are moving from niche to mainstream, supported by improving technology, growing consumer demand, and supportive government programs.

What’s stalled or gone backwards

The nonprofit workforce crisis is worsening. Despite widespread recognition of the problem, meaningful action on NFP sector pay and conditions has been limited. The sector continues to lose talented people to government and the private sector, and the quality of service delivery is suffering as a result.

Greenwashing and impact washing are rampant. The ACCC is cracking down on environmental claims, which is positive, but social impact claims remain almost entirely unscrutinised. The gap between what companies say about their social impact and what they can demonstrate is often enormous.

Place-based disadvantage persists. Some communities in Australia have been disadvantaged for decades, and despite numerous government programs and substantial spending, the outcomes haven’t improved materially. The place-based approaches that work require long-term commitment that our political and funding cycles struggle to provide.

ESG ratings remain unreliable. Despite growing demand for ESG data, the rating systems remain inconsistent and often opaque. Until the underlying data quality and methodology improve, ESG ratings will continue to be a rough signal at best.

The AI factor

AI is the wildcard in the purpose-driven business landscape. On the positive side, AI tools are making impact measurement more efficient, improving service delivery in areas like health and disaster response, and enabling small organisations to do things that previously required substantial resources.

On the negative side, there’s a growing risk of AI exacerbating inequality. Organisations with resources to adopt AI will gain efficiency advantages. Those without — often the smallest and most vulnerable nonprofits — risk falling further behind. The benefits of AI in the social sector will be unevenly distributed unless deliberate effort is made to ensure access.

Several organisations are working to bridge this gap, including AI consultants in Sydney who specialise in helping purpose-driven organisations adopt AI responsibly. But the sector-wide conversation about equitable AI access is still in its early stages.

What to watch in the second half of 2026

Climate reporting quality. As more companies publish their first mandatory climate reports, the market’s ability to distinguish between genuine disclosure and compliance-minimum reporting will be tested. Expect media scrutiny, investor engagement, and potentially ASIC enforcement if reports are misleading.

The NDIS review implementation. The outcomes of the NDIS review will have significant implications for disability service providers and the broader social sector. Watch for how the recommendations translate into policy and funding changes.

Social enterprise financial sustainability. The economic environment is challenging for small businesses generally, and social enterprises are not immune. Rising costs, tightening consumer spending, and the persistent difficulty of accessing appropriate finance will test the sector’s resilience.

Super fund engagement with impact. Australia’s superannuation sector controls trillions of dollars. How super funds engage with impact investing — beyond ESG screening — will be a significant driver of capital allocation toward social and environmental outcomes.

The honest assessment

The trajectory of purpose-driven business in Australia is generally positive. More transparency, more investment, more infrastructure, more awareness. But the pace of change is not matching the urgency of the challenges — climate, inequality, housing, health, Indigenous disadvantage — that purpose-driven business is supposed to address.

We’re making incremental progress on problems that require transformative action. That’s better than going backwards, but it’s not enough.

The organisations, investors, and policymakers who understand this tension — who can combine institutional patience with genuine urgency — will define whether purpose-driven business in Australia achieves its potential or remains a promising idea that never quite delivered.

I know which outcome I’m hoping for. The question is whether enough people are willing to do the hard work to make it happen.