So there it is. For 50 years we’ve heard warnings about greenhouse gas (GHG) emissions disrupting the future climate. Despite this, we have continued to send more emissions into the atmosphere each year. We’ve done this even as we’ve come to accept the science that sets out the threat to our future wellbeing from climate disruption and as we’ve been confronted with increasingly hostile climate extremes in our daily lives.
The future has certainly arrived and we now need to act to avert catastrophe. Last week the UN announced that last year’s GHG emissions were the highest ever. Much good work has been done, but as the climate crisis protestors remind us, it’s not enough. Standing on the threshold of a new decade we know more needs to be done and a significant majority of Australians are supportive of meaningful action to support the UN’s global efforts. The UN says we need to reduce emissions by 7.6% each year over these next ten years as part of a transition to net zero GHG emissions by 2050. That is what’s required to defuse the climate crisis. So, if we want to engage with the worldwide challenge and protect the society we love, that should be our goal.
To achieve this goal we need to engage two key elements that have been largely missing from this issue. We need businesses to commit to net zero transition plans and we need investors and the community at large to hold them accountable in a collaborative way that provides permission and support for them to implement change.
Businesses are a fundamental part of the Australian way of life that is enjoyed by most citizens. Large companies in particular provide many of the goods and services that people want to maintain their lifestyles. Further, they employ large numbers of people and underpin the security of most citizens’ superannuation savings investments. Large companies also have a wealth of talented employees, sophisticated systems and the financial resources to transform their businesses to net zero.
If leading Australian companies (those in the ASX300) commit to net zero emissions, the Australian economy will be transformed bringing greater health and wealth for society. Indeed, for all the protesting, blaming and shaming and boycotting of companies that has occurred in society in the last decade, there has been no net reduction in GHG emissions. The only way we can achieve the change the UN goals require in this new decade will be by working together with large companies and harnessing their strengths.
This change is now urgent, but can it happen? It certainly can, but it will need strong signals from investors that they want to see this change, as well as from the customers for their products and services and the employees who work within their doors. Investors have shown increasing support for companies to adopt a greater ethical approach to business, yet to date, for all the ESG and other social reporting, no meaningful response to the climate crisis has occurred. This now needs to be front and centre of companies’ social contract with society.
Respect for companies is at a low ebb and their social licence is being called into question. As a result they are keen to play a part in responding to the biggest challenge that society has ever faced. The climate crisis is now clearly understood to dominate the future for the whole of society, accelerating species extinction and with the potential to threaten the very survival of the human race. Companies are run by people who are as equally threatened as their customers, investors and fellow community citizens by this frightening prospect. It is in all our interests to make this happen and no company should be exempt. If Alan Joyce can commit Qantas to a net zero emissions future as he did last month then so can every company.