In 2006, Blanchett starred opposite Brad Pitt as one half of a grieving couple who get caught up in an international incident in Morocco in the multi-lingual, multi-narrative ensemble drama Babel, directed by Alejandro González Iñárritu, which received seven Academy Award nominations, as well as the Steven Soderbergh-directed World War II set drama The Good German with George Clooney, and the acclaimed psychological thriller Notes on a Scandal opposite Dame Judi Dench. Blanchett received a third Academy Award nomination for her performance in the latter film. In Notes on a Scandal, Blanchett portrays Sheba Hart, a lonely art teacher who embarks on an affair with a 15-year old student and becomes the object of obsession for an older woman played by Dench. Both Blanchett's and Dench's performances were highly acclaimed, with Peter Bradshaw writing in The Guardian, "Director Richard Eyre, with unshowy authority, gets the best out of Dench and Blanchett and, with great shrewdness, elicits from these two actors all the little tensions and exasperations - as well as the genuine tenderness - in their tragically fraught relationship."
After making Brighton, England their main family home for nearly 10 years, she and her husband returned to their native Australia in 2006. In November 2006, Blanchett attributed this move to desires to select a permanent home for her children, to be closer to her family, and to have a sense of belonging to the Australian theatrical community. She and her family lived in the Sydney suburb of Hunters Hill. Their Hunters Hill residence underwent extensive renovations in 2007 to be made more eco-friendly. Following the sale of their property there in late 2015, Blanchett and Upton purchased a house in East Sussex, England in early 2016.
Blanchett has been a long term proponent of individual and collective action on climate change and other environmental issues. In 2006, she joined former US Vice-President Al Gore's Climate Project. In 2007, Blanchett became the ambassador for the Australian Conservation Foundation. She was made an honorary life member of the Australian Conservation Foundation in 2012, in recognition of her support for environmental issues. At the beginning of 2011, Blanchett lent her support for a carbon tax. She received some criticism for this, particularly from conservatives. Blanchett is a patron of the international development charity SolarAid, which works to create a sustainable market for solar lights in Africa.
In 2006, a portrait of Blanchett and her family painted by McLean Edwards was a finalist for the Art Gallery of New South Wales' Archibald Prize. Another portrait of Blanchett was a finalist for the Archibald Prize in 2014.
Blanchett received Premiere magazine's Icon Award in 2006. In 2008, she received the Santa Barbara International Film Festival Modern Master Award in recognition of her accomplishments in the film industry. That year, she received a Star on the Hollywood Walk of Fame, inducted at 6712 Hollywood Boulevard. She received Women in Film and Television International's Crystal Award for excellence in the entertainment industry in 2014. In 2015, Blanchett was honoured at the Museum of Modern Art's Film Benefit for her outstanding contributions to the industry. She received the British Film Institute Fellowship in recognition of her outstanding contribution to film, presented to her by fellow actor Ian McKellen. Blanchett was also the recipient of the AACTA Longford Lyell Award in 2015, for her "outstanding contribution to the enrichment of Australia's screen environment and culture." In 2016, she received the Costume Designers Guild Lacoste Spotlight Award, in honour of an "enduring commitment to excellence" and her "appreciation for the artistry of costume design and collaboration with the Costume Designers."