Australia’s biggest property companies are making net-zero emissions pledges – now we can track them

Huge crowds marched last week to demand progress towards net zero emissions – and companies are listening.
AAP Image/James Ross

Amandine Denis, Monash University

Corporate Australia is taking action on climate change. Most recently, at the UN Climate Summit, Atlassian cofounder Michael Cannon-Brookes announced the A$26 billion Australian software company’s commitment to net zero emissions by 2050.

Net zero pledges like this are becoming more common but currently there is no way to really track momentum towards net zero emissions across different sectors of the economy.

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Now, a Net Zero Momentum Tracker initiative has been established by ClimateWorks Australia and the Monash Sustainable Development Institute to track emissions reduction commitments made by major Australian companies and organisations, as well as state and local governments.

The tracker aims to place all commitments to net zero emissions in Australia in one place and evaluate how well they align with the Paris climate goals.

Property sector tracking towards net zero emissions

We began by assessing Australia’s property sector. Last week we released a report examining all property companies listed in the ASX 200, plus all of those required to report their emissions under the National Greenhouse and Energy Reporting Act.

Among the companies we looked at are Dexus, Mirvac, Stockland Corporation, GPT Group, and Lendlease. They develop, own or manage some of Australia’s largest corporate offices, commercial properties, retail centres, retirement villages, and residential developments.

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The report found almost half – 43% – of Australia’s largest listed property companies have made commitments that closely align with the Paris Climate Agreement, aiming to achieve net zero greenhouse emissions before 2050 for their owned and managed assets.

Significantly, the six companies with the most ambitious net zero targets represent 36% of the ASX 200 property sector. Among these six, several major companies – Dexus, Mirvac, GPT Group, and Vicinity – are aiming for net zero emissions by 2030, demonstrating the business case for strong climate action.

Sector leaders can inspire copycat action

By highlighting what action organisations are taking and how, the Net Zero Momentum Tracker initiative aims to encourage more organisations to make and strengthen commitments to reduce their emissions, in line with the goal of net zero emissions by 2050.

For example, Australia’s largest owner and manager of office property, Dexus, has a comprehensive strategy for reaching its goal of net zero emissions across the group’s managed property portfolio. This includes reducing energy use, shifting to renewable electricity, electrifying their buildings, and reducing their non-energy emissions from waste, waste water and air conditioning.

Of particular significance is Mirvac’s pledge to be “net positive” by 2030. This means the company aims to go beyond net zero, reducing emissions by more than its operations emit. Mirvac has established an energy company to install rooftop solar on their commercial buildings and is selling power to occupants, among other initiatives. The company also has a “house with no bills” pilot project, to explore how their upstream indirect emissions can be minimised for residential developments.

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Another major company, the GPT Group, has extended its commitment beyond the assets it owns and manages to all buildings it has an ownership interest in, including buildings it co-owns or does not manage.

These companies will get multiple benefits from their action, including reduced operating costs, better health and productivity for occupants, and increased sales prices, rents and occupancy rates.

Need to accelerate action

While many property companies are tracking in the right direction, none of the companies we considered had net zero targets which comprehensively covered all of their emissions – such as those from co-owned assets, their supply chains and investments.

There is still significant opportunity for property companies to strengthen their commitments towards net zero emissions. This requires targets which address the full scope of direct and indirect emissions within each company’s influence, supported by detailed plans to achieve this.

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By making these public commitments to reduce emissions, the property sector is helping build momentum towards achieving this goal across the entire Australian economy.

The next assessments to be undertaken by the Net Zero Momentum Tracker initiative include the banking sector and state and local governments.The Conversation

Amandine Denis, Head of Research, ClimateWorks Australia, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Everyone’s business: why companies should let their workers join the climate strike

A climate rally in Sydney in March 2019.

Ian McGregor, University of Technology Sydney

Multinational ice cream company Ben & Jerry’s will close its Australian stores for this month’s global climate strike and pay staff to attend the protest, amid a growing realisation in the business community that planetary heating poses an existential threat.

It is one of hundreds of business in Australia and many more overseas that plan to support the strike on Friday, September 20.

Millions of people around the world are expected to take part in the schools-led civil action, led by 16-year-old Swedish student and climate activist Greta Thunberg.

A young child holds a sign as part of a climate strike in Sydney in March 2019.

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The strike will call for decisive global action on climate change ahead of a major United Nations summit in New York on September 23.

Scientists themselves recently urged their colleagues to embrace political activism, even civil disobedience, arguing that using peer-reviewed research to influence policymakers has not brought about the radical change needed.

Ben & Jerry’s will close 35 shops across Australasia for the duration of the strike. The company’s Australian arm has declared that business as usual “is no longer a viable plan” in the face of a climate emergency. Or as the company says in its values statement: if it’s melted, it’s ruined.

No one will be spared from the effects of unmitigated climate change, and that includes the business community. That’s why I argue that all businesses should support the climate strike any way they can.

There is no escape

The Department of the Environment and Energy has warned of the pervasive effects on Australian business of higher temperatures, altered rainfall patterns and more frequent or intense fires, heatwaves, drought and storms.

The department says the changes will be felt “by every person and every organisation, public or private, and at all levels, from strategic management to operational activities”.

Firefighters battling a bushfire on the Sunshine Coast on September 9, 2019. Bushfires are expected to become more frequent and intense as a result of climate change.
John Park/AAP

Many in the business sector recognise the looming challenge, including the Business Council of Australia which has called for a bipartisan energy and climate change policy framework.

So who’s already on board?

Ben & Jerry’s Australia and New Zealand marketing manager, Bert Naber, confirmed to me in an interview that the company would close its stores for several hours on September 20.

Staff will be paid while the stores are closed. The company is strongly encouraging staff to take part in the strike but their attendance is not compulsory.

A photo from June 2019 showing dogs hauling a sled over a rapidly melted ice sheet during an expedition in northwest Greenland.
Steffen M. Olsen/Danish Meteorological Institute/ EPA

The company will also close its US stores for the strike, joining other retailers such as Patagonia, Lush Cosmetics, and personal care firm Seventh Generation.

Australian marketing agency Republic of Everyone is closing its business for the day. Founder Ben Peacock is encouraging his staff to attend the event and perhaps even take a volunteer role.

Other large organisations such as software giant Atlassian are making it as easy as possible for staff to attend.

Atlassian chief executive Mike Cannon-Brookes.

Atlassian chief executive Mike Cannon-Brookes said the climate crisis “demands leadership and action … But we can’t rely on governments alone.”

Cannon-Brookes co-founded Not Business As Usual, an alliance of progressive Australian companies pushing for greater action on climate change. As of September 9, more than 230 companies had joined the alliance and pledged to allow employees to strike including Future Super, Canva and Bank Australia.

On climate, business is a broad church

Calls from the Australian business sector for climate action have grown louder as the threat worsens. The sector has also demanded long-term certainty to assist with investment decisions – particularly energy businesses and large power consumers such as manufacturers.

Operations at Ravensthorpe nickel mine in Western Australia, owned by BHP. The firm has called for stronger climate action.

However across the business community, research indicates that views are split on the need for stronger climate action.

Some parts of the business sector, such as insurance, reinsurance, financial services, renewable energy and energy efficiency have advocated for strong climate action early since the 1990s.

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Fossil fuel extraction industries, fossil fuel-driven electricity generation and vehicle manufacturers have, however, traditionally opposed strong emissions reduction targets.

There are exceptions. [Global mining company BHP], for example, is now calling for stronger action because it recognises that climate change is a huge global challenge that requires an urgent collaborative market and policy response.

Climate-aware investors are also calling on companies to act. They include superannuation giant HESTA, which recently demanded that Australian oil and gas companies Woodside and Santos link executive pay to reducing their emissions.

Advice for employees wanting to attend the strike

Of course, many employers will not be closing their doors for the climate strike and some workers will have to seek leave from their jobs to attend. The exact rules surrounding this will depend on individual awards or enterprise agreements.

In some cases employees may be able to negotiate an arrangement with their manager to enable them to participate in the strike.

Swedish schoolgirl and climate activist Greta Thunberg, who has inspired climate strikes around the world.

While I strongly support the strike, I do not recommend “chucking a sickie” or not turning up for work so you can take part. That approach is likely to make your employer unhappy and leave them in the lurch.

I recommend that employees providing vital services, such as paramedics and the like, support the strike in ways other than leaving their duties. Supporting events in the lead-up to the strike can be found here.

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At the time of writing, 26 unions were listed on the Schoolstrike4climate website.

National Tertiary Education Union president Alison Barnes told me in an interview on September 4 that “the time for urgent action is now … we encourage people to take appropriate leave or make necessary arrangements with their employers to attend [the strike]”.The Conversation

Ian McGregor, Lecturer in Management, UTS Business School, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Risky business: how companies are getting smart about climate change

Tayanah O’Donnell, University of Canberra

The divestment movement is gaining momentum – and is just one of the emerging risks from climate change that businesses face. The Paris climate agreement not only signalled social change but also sent the market a strong signal to move away from carbon-intensive investment.

The divestment movement may be seen by some businesses invested in fossil fuels as a risk. But it is not the only force shaping how companies address climate change. So, what are some of the other factors in rethinking climate risk?

Evolving social norms

The Paris Agreement recently gained more steam with ratification by the United States and China. This signalled the intent of these leading global economies to commit to helping to limit global warming to 2℃. Achieving this will require a transition to a low-carbon or decarbonised economy. China, for example, has been aware of how important this is since 2008.

Since the launch of the Low Carbon Economy Index by PricewaterhouseCoopers in 2009, companies have been better equipped to understand and measure private sector climate risk. This has flow-on effects to just about all human behaviours, and has had a particularly significant impact on private equity investments.

In particular, pension funds and the insurance sector are among the leading sectors in considering future climate risk within and across their portfolios. This is facilitating evolving social norms around climate change. These changes have long been recognised as critical for climate change mitigation and adaptation.

The role of law

Liability risk remains at the forefront in current trends. The acceptance of legal responsibility demonstrated by global leaders’ ratification of the Paris Agreement is all the more interesting when we consider recent developments in climate litigation.

Some argue that, in future, there will be parallels between tobacco and asbestos tort litigation and climate litigation, given that the consequences of a changing climate have been well known for decades, and widely cited by scholars and practitioners alike. It is therefore difficult for a legal entity to claim ignorance of climate risks.

Internationally, a decision in 2015 held Dutch public officials legally accountable in reducing emissions. In the United States, instances of litigation have increasingly focused on companies’ disclosure of known future climate risk. Pressure has also been building on Exxon Mobil as evidence emerges that the company may have lied to shareholders about this known risk.

In Australia, some recent interesting developments in coastal planning law are contributing to a more coherent body of climate law.

Fiduciary duties are an important aspect of rethinking climate risk. In law, they can require companies to disclose future risk. A failure to disclose on “the business strategies, and prospects for future financial years” under the Corporations Act may be considered a breach of the law and subject to ASIC enquiry.

While some regulatory guides exist for how to achieve general compliance, recent submissions to the Senate inquiry into carbon risk disclosure have argued that specific regulatory guidance for future climate risk is needed. Arguably, disclosing future risks includes future climate risks to assets and company investments.

The courts are moving where regulation and policy may be slower to act. In April 2016, the New South Wales Supreme Court relaxed the hurdles for shareholders to bring action against a company in a case where an insurer, HIH, led the market to believe it was trading more profitably and had greater net assets than was the case. This artificially inflated the HIH share price, resulting in shareholders suffering a loss because they bought overpriced shares. This case is important for shareholder class actions because it is the first time the court has accepted the principle of indirect market based causation.

In a similar way, a failure to disclose known future climate risk in required disclosure documents could potentially amount to misleading and deceptive conduct. This is particularly the case where companies may fail to disclose their asset exposure to climate change impacts.

Technological risk

The World Economic Forum’s Global Risks Report 2016 noted that the number-one risk to the global economy was a failure to mitigate and adapt to climate change.

Some argue that technological responses, including carbon capture and storage, continue to require research and development input. Others suggest that investing in renewable energy, particularly for developing countries, will lead to more sustainable global outcomes including, importantly, social equity.

While mitigation technologies continue to compete for long-term success, investors need to be increasingly aware of where and how they prioritise their mitigation efforts.

Where to now for Australian companies?

The 2016 carbon risk disclosure inquiry was due to publish its report in June 2016 but lapsed due to the federal election. This Senate inquiry ought to recommence as a matter of priority.

Additional legal mechanisms that will have flow-on effects for evolving social norms and for rethinking climate risk could include legislative change to require the inclusion of reporting asset exposure risks, under the National Greenhouse and Energy Reporting Act.

Climate risk, the transition to a low-carbon economy, evolving social norms and the continued growth of climate law evidence a need to ensure coherence across economic, social and governance frameworks.

The Conversation

Tayanah O’Donnell, Research Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.