Cutting through with KSIB- Series 2, Episode 2

Strip of a painting of Ironbark trees

October 14, 2026

Welcome to the second episode of Cutting through with KSIB for the financial year ending 30 June 2027 where we share our reflections on key strategic issues impacting Australian businesses at an operational level. 

The 2 key topics covered in this newsletter are: 

  1. The political AI narrative v the practical one. Cutting through the noise and successfully implementing AI at scale.   

  2. Year 2 of sustainability reporting – what have we learned as a market from Year 1 and what are the watch outs for Boards and Executives? 

If you enjoy our insights, please forward our newsletter to your team or contacts so they can subscribe. This can also be done on our website. If you would prefer, you can listen to this newsletter as a podcast. 

As always, you can feel free to email me at kristin@ksib.com.au

Regards 

Kristin 

Kristin Stubbins

CEO and Founder, KSIB

① The political narrative v the practical

There is a danger that the AI narrative becomes binary and only deals with the extremes. Everyone (maybe) loves a clickbait headline but there is an important reality for the Australian economy that needs to be considered – other economies are advancing with this technology at pace.  There is a window for us to adopt AI at scale and safely.  If we don’t embrace this opportunity as a market, we run the risk of becoming uncompetitive, not because AI takes human jobs but because business models and customer focus is changing.  It will be a shame if the narrative goes the same way as certain aspects of the energy transition whereby the extreme views get all of the media attention.   

The AI revolution provides an opportunity to reassess strategy and business models.   We have seen some very successful outcomes with positive ROIs, where clients have focused on the bigger picture opportunities, including focusing on customer offerings and service.  This has been across all industries from financial services through to manufacturing. 

What we are seeing in practice is that many of the opportunities to drive business transformation are through building software using AI. Agentic systems can also sit around this but should be planned and managed carefully.  We have started to use a practical framework to help clients with this decision making:

What's the business opportunity or problem?

Deeply understand the customer solution or operational support you're aiming for. Documenting the demand and desired outcome forces true understanding, tested with a clean-sheet question: “how would you design this process from scratch?”
  

Understand and document the current process

AI tooling can ingest documents, including unstructured data, to derive a preliminary view of a process, an easier starting point for humans to check and refine than describing it from memory. This now takes days not months.
  

Eliminate unnecessary elements from the process

Once the process is factually visualised, unnecessary elements become easy to identify and eliminate, such as manual steps that no longer add value.
  

Plan for simplification using the right technology choices

Redesign using a simplification mindset, with planning and scenario analysis. Identify whether deterministic or probabilistic technology fits, which then determines the controls and human oversight needed.

Steve Brown has some reflections on what is happening: 

  • There have been so many alarm bells raised about AI in the last month, and I’d take the warnings seriously.  Recursive AI (AI that can improve its own models, code or research processes) is worth considering but also requires hardware that is naturally human gated. 

  • One interesting point in the news about the hacking disclosures from the AI organisations is that the models got in using basic techniques such as exploiting weak passwords or unauthenticated endpoints. These are things that organisations should be focusing on today, regardless. They’re about visibility of your estate and what security controls you have. 

  • The concern really is about what attackers can do with increasingly capable tools.  Corporate defenders need access to the same level of tooling and need to respond at speed to threats.  The attacker economics has changed. Historically many organisations may have been safe because no one was discovering them.  Now it is so simple for AI to perform the attack and patching has become a huge constraint for many companies. 

  • There are a few key questions that executives and boards need to ask their cyber security teams or providers to work through with them: 

  1.  What are the cyber events that could seriously harm us? 

  2.  How much risk are you choosing to carry? 

  3.  What are you doing about the risk you need to burn down? 

  4.  How are you making sure your plan to burn down risk is working? 

These questions are answered in a practical guide that we have developed at KSIB, described in this article: Demystifying cyber risk in the age of AI — KSIB.  This guide is comprehensive, and is aimed at helping all organisations, even if you don’t have a specialist cyber security team. 

② Year 2 of sustainability reporting – what have we learned from Year 1?

If your organisation got through its first report, congratulations! 

Sharon Broekhuizen, sustainability reporting specialist from KSIB makes the following points about the lessons we have learned: 

  • Generally the Group 1 reporters have done a pretty good job for the first year of reporting, a sentiment shared by the regulator. Foundations have been built but Year 2 presents a significant step up in terms of complexity and effort. The second year of reporting for Group 1 reporters extends the reporting boundary beyond your own emissions to those generated across the entire value chain, which is a very broad concept. In year one we were focused on considering data from a company’s own electricity and fuel usage whereas now we are having to think about the emissions being generated from suppliers, from inbound and outbound logistics and transport, from end-of-life products or even use of your products if they are used in a further value adding process. For financial services clients, they are grappling with the measurement of financed emissions. 

  • A key challenge with scope 3 emission reporting is that the data doesn’t reside in your business. Companies are reliant on third party data and if primary data is not available, estimation techniques need to be used. This then invokes a significant amount of judgement to create estimates and methodologies. In the early years of this reporting, it is going to be difficult to obtain good primary data, but this will improve over time.  Industry data sets are available, and you should discuss this with your consulting and technology partner who often have access to this data using economies of scale. 

  • The assurance scope for Group 1 reporters now covers the whole report including scope 3 emissions and Directors also need to be aware that they have the same obligations under the Corporations Law as they do for financial reporting. KSIB’s subsidiary Appraise reporting has produced a Directors’ Guide to 2026 Reporting Risk entitled “Behind the Signature”.  

Our work on sustainability reporting is advisory – we work with clients to make the reporting as meaningful and simple as possible and we partner with NetNada to bring efficiency and rigour to the data collection, reporting and emissions tracking process.