Next Monday, Sir Nicholas Stern, a former chief economist with the World Bank, will warn that governments need to tackle the global warming problem head-on by cutting emissions or face economic ruin. His findings, according to The Guardian, will turn “economic argument about global warming on its head by insisting that fighting global warming will save industrial nations money.”
The US and Australia have refused to join the Kyoto protocol because it would harm the economy. Prime Minister John Howard told Four Corners recently “we have a lot of reservations about carbon taxes because carbon taxes are going to impose huge costs on the Australian economy.”
But Crikey has put managed to put together a rather long list of CEOs who seem to disagree with the PM. The following business leaders are putting their money where their mouths are and demanding a stronger government response to global warming. They’re also showing how businesses can become more profitable by responding to climate change now.
Michael Hawker, CEO, Insurance Australia Group: Has recognised the risks to insurance industry from global warming and the business opportunities. Recently told CEO Forum Group, “We have a very direct interest in this…we pay claims as a result of environmental events, such as storms, bushfires, and so on, many of which have a direct relationship to global warming. One of the consequences of this is the increasing costs of claims in the market place…We respond to that in two ways: …price the cost of insurance to reflect the increased risk, but the other is to explain to the community the likely costs of environmental warming…” A member of the Australian Business Roundtable on Climate Change, launched in April, which has called for Australia to have its own carbon pricing regime.
David Morgan, CEO Westpac: Westpac has created a green home loan product that distinguishes Westpac from other banks. In June 2003, Westpac adopted the Equator Principles, a voluntary set of guidelines which have been developed for managing social and environmental issues relating to the financing of projects. In a joint CEO statement as part of the Business Roundtable, Morgan stated, “…Australia can deliver significant reductions at an affordable cost. Furthermore, the longer we delay acting, the more expensive it becomes for business and for the wider Australian economy.”
Paul Anthony, CEO AGL: Told the Eureka Report, “I think the biggest overhang though is the lack of any coherent policy on carbon trading…what we’re trying to do is build a modern fleet of generating capability that’s a mix of renewable and clean-burn gas-fired generation. So in the back of our mind, we’re assuming that there’s going to be a carbon policy in place, and every single step we take to build out our generation fleet is either clean-burn gas-fired technology or we’re looking at renewable technology.” AGL’s website states, “AGL has a number of green energy products under a program called AGL Green Choice which help reduce greenhouse gas emissions associated with traditional, coal-fired electricity generation.”
Keith Scott, head of Australian and New Zealand operations, Swiss Re: Another member of the Business Roundtable on Climate change, has stated, “The year 2005 set a record in terms of the number of natural catastrophes, and there is no reason why 2006 would be any less a year.” Swiss Re, one of the world’s largest reinsurers, has launched Australia’s first ever natural catastrophe bond as a way of insuring against major disasters. In the joint Business Roundtable CEO address, stated, “Modelling by the Allen Consulting Group revealed the cost of doing nothing (compared with taking early action) would be a cost impact on business after year 2020, slowing GDP to 1.9% through to 2050. But if early action is taken, growth of 2.1% could be sustained through 2050, electricity would be cheaper and jobs created.” Swiss Re website states: “Climate change entails more than just risk. Efforts to abate it and to provide cover against its adverse effects also create new business opportunities.”
Grant King, managing director, Origin Energy: Origin Energy’s website states: “In 2005 we introduced GreenEarth gas the first product of its type in Australia to offset a customer’s greenhouse emissions through investment to reduce emissions. In 2005 our Green Power customer base increased to 55,000 customers. Origin continues to be the Australian retail market leader for installation of grid-connected solar photovoltaic panels. This year we have provided a greater level of detail around our environmental performance.” Origin is also a member of the Business Roundtable and CO2 Group Limited. A senior executive of Origin told the recent Australia New Zealand Climate and Business conference, “Emissions produced are not being priced, that’s our biggest dilemma right now.”
Tim Warren, the chairman of Shell Group Australia: Told the second Australia New Zealand Climate and Business conference held in South Australia earlier this year, “business is now ahead of mainstream politics in Australia.” He added if a solid policy framework based on market mechanisms was put in place “then science and business will do the rest.” The conference highlighted “business support for an economy-wide price signal has significantly strengthened since the inaugural conference in Auckland in 2004.”
Maria Atkinson, former head of global sustainability, Lend Lease, now Executive Director of the Green Building Council of Australia: Under Atkinson, Lend Lease has built some of the most energy efficient buildings in Australia, cutting emissions by around 60% or so from standard. It’s enhanced their reputation and the tenants have lower energy bills. Their sustainability mission states, “Our products are designed to exceed the best environmental standards and lead the market in environmental design and the buildings we occupy are neutral for energy, water and waste and best practice for indoor environment and air quality.”
Gerry Hueston, the president of BP Australasia: Hueston told a business gathering last year that his fellow corporate leaders must confront the inevitability of climate change by switching from fossil fuels. Hueston said Australia’s business community must change its practices and unite behind efforts to reduce greenhouse gas emissions. “My view is that we are running out of time to deal with the environmental consequences of fossil fuels much faster than we are running down our stocks of them,” said Hueston. Also member of the Business Roundtable. BP’s website states: “In 1997, we acknowledged the need to take action to reduce greenhouse gas emissions, and set a target to reduce emissions from our own operations to 10% below 1990 levels by 2010. We achieved the target nine years ahead of schedule, and in doing so, added US$650 million value to our global business.”
Paul Anderson, ex-BHP CEO and current BHP and Qantas director head of Duke Energy in US: Told Sunrise last year, “Greenhouse is growing more and more important to industry, to society in general and to a lot of the states… Personally, if you could substitute the GST for a carton tax, as long as you’re revenue neutral, I think it would be a great idea. Again, you have the fear that you don’t just want to add the tax on top of other taxes, but if you could say instead of taxing goods and services and every time somebody buys something at the store, they pay a 10% tax, if instead it was based on how much carbon was in the fuel that they consumed, I think it would be environmentally sound and it would be a revenue neutral kind of action.”
Harry Debney, CEO of Visy Industries: A member of the Australian Business Roundtable, who have said that Australia needs to get used to the idea of living in a world where greenhouse gas emissions cost money. Debney, on Four Corners in August, said “.. we make no apologies for the statement, we want to design a long, loud and legal framework to establish a carbon price signal to deliver cost-effective emission reductions.” Visy’s environmental policy states “Visy’s commitment to sustainable development means we work to ensure our activities, products and services enhance the environment in the communities in which we operate.”
James Strong, Chairman of Woolworths Limited (also Chairman of IAG): Woolworth’s Corporate Social Responsibility Report for 2005 has an extensive environmental performance report that includes a section on “Electricity consumption and associated greenhouse gas emissions”, detailing the steps Woolworths is taking to reduce its consumption, and the results to date. This list is just a start, so please send any suggestions to [email protected].