There was a buzz of excitement and optimism as a 190-strong group of business leaders, CFOs and politicians gathered together at the Hilton Sydney on Wednesday morning for an event that was set to tackle an issue that Deloitte recently reported as being the key priority for Finance leaders in 2021: Climate change and how businesses need to respond as we reach a critical juncture in efforts to tackle global warming.
Members of Parliament from both sides of politics (Minister for Energy & Environment Matt Kean and Shadow Minister for Climate Change and Energy, Chris Bowen) participated in a positive and hopeful discussion about Australia’s carbon neutral future and the wealth of opportunities it will bring. The discussion was led by academic researcher, author and leading voice on climate change, Dr Rebecca Huntley.
From moral issue to economic imperative
At the heart of the discussion was a strong message of progress and of how the environmental narrative has now shifted in focus from a high-level moral issue to a more focussed economic argument for change. With a transition to renewable energy being set to create opportunities for efficiency, innovation and growth across all sectors (not to mention the generation of thousands of new regional jobs), businesses are in a strong position to profit from this transition and their leaders need to be key partners is the conversation. As Minister Kean stated in his opening address, ‘It would have been unimaginable before that business and conservation groups could sit at the same table; now it is unthinkable that they wouldn’t’.
However, there is still a long way to go, and with Australia now gearing up to radically reduce their carbon emissions in the coming years, it’s never been more vital for politicians and businesses alike to come to the table. As Chris Bowen stated ‘We need a new “no regrets” approach, where we don’t miss the opportunities that strong action now on climate change will yield’.
Positioned for success
A key message reiterated across the presentation was the need for Australia to get ahead of the global curve as we move to a low-carbon world, to ensure we maximise our economic potential as this key time.
Countries around the world are vying for dominance in their ranking as suppliers of clean energy. However, Australia’s abundance of natural resources, mean we are uniquely positioned to be one of the largest global exporters of renewable energy with future plans including the $20bn Sun Cable project, which aims to deliver solar energy from the Australian outback directly to Singapore via a pipeline.
At this point in the discussion, Dr Huntley reflected on the important of strong federal leadership on this issue, to ensure that Australia is taken seriously on climate change. Her research has shown that, currently the biggest perceived barrier to change is the consistency of federal policy.
Whilst this is an issue that won’t be resolved overnight, the action taken by the states to fill the vacuum, often crossing partisan lines, demonstrates the drive and sheer necessity for national regulations to be put in place as a matter of utmost importance.
How businesses are responding and leading
In my own address, I proposed that delay and putting things off are the biggest risks businesses face currently. However, there are very encouraging signs of change with a number of my CFO clients saying that they have been prompted to take action by their own employees questioning their policies on climate change. This clearly illustrates the power of individuals speaking up and being visible on climate change and how it can genuinely make a difference.
In terms of how businesses are responding to climate change, we now commonly see CFO’s who are sharply focused on climate change impacts related to their strategic planning, capital allocation and risk assessment.
As the Harvard Business Review reported all the way back in 2007, ‘Each company’s approach will depend on its particular business and should mesh with its overall strategy’. They go on to say ‘Business leaders need to start treating carbon emissions as costly, because they are or soon will be, and companies need to assess and reduce their vulnerability to climate-related environmental and economic shocks. Every firm needs to get those basics right, as a matter of operational effectiveness’.
Moir Group run a variety of events on thought-provoking topics for finance professionals across the year. If you’d like to sign up for future Moir Group events, please email us at firstname.lastname@example.org