Aug 06, 2010 - 10:00am
This was published in The Punch, 6 August 2010.
By Julian Poulter, Business Director, The Climate Institute
Is your CEO or director on “Out of Office AutoReply” this month? If so, chances are that they are far from the southern hemisphere. August is holiday season in the North and with the long standing link to Australia’s heritage, it’s a good bet that there is a European and probably London stopover on the way. Whilst the Henley regatta and Wimbledon might be over, there are still plenty of August attractions in the old Dart to attract the captains of Australian business.
Having just returned to Australia via the climate policy desert of the USA, the European climate change landscape couldn’t be in starker contrast. Whilst American media seems destined to miss the BP oil spill as an opportunity to get their citizens to connect the dots between fossil fuel pollution of all types and drive their own leaders to climate action, Europe is a different story. In the European climate world, business meetings and conferences talk of how to deal with climate change and when, not if? They talk of the risks of extending pollution reduction targets even further, not of avoiding targets at all. Climate deniers are forced into backrooms and dare not raise their heads far for fear of ridicule. A career in UK climate denial is accompanied by US and Australian visa applications because jobs are thin on the ground there.
Frankly Europe is a breath of fresh air and makes it clear that a two speed clean energy and low pollution economy is not developing, but has already developed. Germany is in the industrial engineering phase of climate change, not the design phase. The UK and other nations are not far behind. Propagating the concept that Asset Owners (Pension and Super funds) should disclose how they intend to manage climate change risk and opportunity in this part of the world is met with knowing smiles that another inevitable piece of the climate puzzle is forming. A Climate Institute and the Australian Institute of Superannuation Trustees (AIST) survey of Australian funds however shows that a majority are at first base on the issue though some leaders are emerging.
And what of the wider view from up there? Unlike Australia’s somewhat narrow view of the world, Europeans are truly global and the knowledge of our far sprung land surprisingly detailed. Two opinions repeat themselves consistently – our politicians have let us down and we are run by the mining industry. This is not guesswork – our two largest miners Rio and BHP are dual listed on the ASX and FTSE. Large swathes of the Australian industry are owned by UK companies. Politically, Europeans remember Rudd signing Kyoto as a first step and are now scratching their heads at the ETS delay and the increasing number of Australian political leaders who have lost their jobs thanks to climate change.
In institutional finance, climate investment and the role of capital markets are becoming interwoven into everyday life. When policy makers pencilled in the possibility of encouraging Europe to raise its targets from 20% off 1990 levels by 2020 to 30%, the opposition by the Confederation of British Industry (The UK equivalent to the BCA)was shouted down by other businesses and industry groups backing greater drivers of carbon competitiveness and long term strategic advantage.
On my last day in London the Independent newspaper published a front page story about how climate change impacts on the food chain are so crystal clear that the consequences range from very, very bad to catastrophic. On the same day, the Financial Times posted a front page story about climate change being undeniable. The FT is not a green rag but a newspaper dedicated to informing the City of London financiers (and the world) of critical information relevant to capital markets. The implications of such certainty demand every fund manager and pension fund to look at their portfolios with the same intensity they did during the sub-prime crisis.
So we hope that our travelling business leaders are on their pool sun beds reading the European climate press and absorbing the motivation for action on pollution and climate change. As they return home, hopefully they will press our politicians for greater urgency, whilst preparing to drive low pollution best practice into their own Australian companies.
Whilst no-one is a fan of political junkets, the tragedy of this election timing is that our campaign strapped pollies are not up there to join them this year.
Julian Poulter is also the Executive Director of the Asset Owners Disclosure Project.
As Business Director at The Climate Institute, Julian is responsible
for projects in the business sector, with several of the initiatives focused on investment and finance. He is a highly experienced business
professional, with his primary experience in strategy and change
consulting combined with several CEO and director roles. He is currently
a director of several firms, a business lecturer at Sydney University
and is passionate about the ability of the free market to accelerate
climate change solutions.