‘Good for the goose’: Labor backs government climate reporting
A Labor government would strongly back the push for companies to disclose risks to their business from action to limit climate change and will sign government agencies up to the tough, new reporting guidelines too, opposition climate and energy spokesman Mark Butler says.
The move could change the way the Department of Industry forecasts demand for key Australian exports such as coal and LNG in its Resources Quarterly and other publications, which have been relied on by Resources Minister Matt Canavan and coal exporters Whitehaven Coal, Yancoal and New Hope Corporation to talk up prospects for their industry.
Regulatory agencies such as the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, the ASX, the Accounting Standards Review Board and the Reserve Bank of Australia have racheted up the pressure on financial institutions and listed companies to adopt reporting in line with the Taskforce on Climate-related Financial Disclosures.
This requires companies to give a full accounting of climate risks, including under the “two degrees scenario” – where the world takes tough action to limit global temperature increases to well below 2C above pre-industrial levels, as required by the Paris agreement on climate change.
Scientists say the commitments made so far under the Paris agreement would see at least 3C of warming, triggering more extreme weather, increasing the cost of insurance for infrastructure and businesses and in some cases making insurance unobtainable.
Mr Butler told The Australian Financial Review in an interview that TCFD reporting was “a monumentally important development” because “investors are picking up the need for carbon risk to be a critical part of investment strategies and business cases that boards and CEOs present to annual meetings”.
He said regulators seemed to be doing a good job explaining the need for better disclosure and scenario analysis from businesses in Australia.
But the federal government appeared to be dragging the chain, he said. For example, the Department of Industry’s Resources Quarterly uses scenarios based on existing commitments that scientists say would condemn the world to at least 3C of warming and lead to steadily increasing coal exports.
Mr Butler said it was a case of what’s good for the goose is good for the gander. “Businesses are increasingly expected to [abide] by the TCFD and I think there will be implications for how government develops policy as well,” he said.
“I think the days of having one arm of government focused on implementing the two-degree commitment while other arms of government are building policies around three to four-degree scenarios is going to come under a lot of pressure.”