Climate leaves corporate Australia snoozing

In Australia, one of the countries most vulnerable to the vagaries of a changing climate, very few companies pay attention to climate impacts, according to an assessment of business attitudes.

By Kieran Cooke, May 1, 2013
Climate News Network

LONDON – Very few companies in Australia give climate change much attention, either in terms of corporate planning or in assessing future risks to their businesses, according to survey of more than 100 companies by the government’s National Climate Change Adaptation Research Facility.

“The private sector’s failings in assessing and managing existing climate risks are becoming increasingly evident,” the report said. The transport sector knows little about about the potential impacts of climate change. The tourism industry has done little to prepare for what the report describes as considerable cascading effects of changes in climate.

And the property and real estate sector faces “a phenomenal challenge,” with an estimated 81 billion Australian dollar ($84 billion) worth of property vulnerable to a rise in sea levels and more than half a million homes at risk of floods, the review found. Much of Australia’s infrastructure is aged, says the report, and has not been designed or operated with climate change in mind.

The study also questions the role of the Australian Government: on one hand government expects the private sector to adapt to climate change, yet on the other it gives few, if any, incentives to promote changes in corporate behavior, the report said. Australian companies are missing out on opportunities and innovations associated with climate change while Asian-owned mining, gas and technology business are cashing in.

Economic shock absorber

The report notes that the insurance industry is at particular risk, as it acts as an economic shock absorber and underpins much of present-day economic activity.

“Climate related events are causing an increasingly disproportionate percentage of payouts,” it said. The costs of insurance are going up – and in some instances businesses might find their activities can no longer be insured.

The study also highlights what it calls the legal imperative which should be driving businesses to adapt to climate change.

“One of the key legal findings from the research is that corporations need to identify their climate-related risk, and, once quantified, ensure that such risk forms an integral part of their environmental risk management process,” said Mark Baker-Jones, one of the report’s authors.

A separate report released in London earlier this month warned of the risk of investing in mining and other companies which have assets that ultimately – if climate change is going to be tackled – might have to stay in the ground.

On a per capita basis Australia is one of the world’s leading greenhouse gas emitters, mainly due to its giant coal mining industry. Noting an increase in extreme heat waves, flooding and bush fires in recent years, the Government’s Climate Commission has called for fast and deep cuts in emissions in order to cope with future changes in climate.

Climate change is likely to be a key issue in federal elections scheduled for later this year. Tony Abbott, leader of Australia’s main opposition Liberal Party, has dismissed climate change science as “crap.” He has vowed to repeal a carbon tax introduced last year by the ruling Labour Party, headed by Prime Minister Julia Gillard. He has also promised to repeal a tax on mining activities.

Kieran Cooke is a founding reporter of the Climate News Network and a former BBC and Financial Times correspondent in Ireland and Southeast Asia.Climate News Network is a journalism news service led by four veteran British environmental reporters and broadcasters. It delivers news and commentary about climate change for free to media outlets worldwide.