Climate change conferences, such as today’s COP26, were once the domain of scientists and bureaucrats.
Now, they are increasingly attended by big business delegations eyeing off the “green dollar” — former climate negotiator for Australia, Richie Merzian, calls it a “trade show” for climate change.
It’s a sign that climate change is as much an economic challenge as it is a scientific one.
In fact, one of the four goals of Glasgow is “mobilising finance”; $90 trillion is needed for infrastructure to assist the economy to decarbonise by 2030, according to the World Bank.
One of Australia’s biggest investors in renewables, Mike Cannon-Brookes, said “$90 trillion is probably an understatement”.
“There’s no legislation, there’s no planned interim targets, which means as an investor, you can’t be sure what environment you’re investing in, which means you’re going to need a higher return because the risk is higher, which means the cost of doing business in Australia is going to go up.”
COP26 will see an unprecedented showing of corporations, bringing the quality of their commitments — and motives — into sharp focus.
Polluters tackling emissions
Australia’s largest independent fossil fuel supplier, Ampol, is switching some of their petrol stations to fast-charging electric vehicle stations, according to CEO Matt Halliday.
“We do view ourselves as a distributor of energy. Over time, we’ll be distributing different forms of energy,” Mr Halliday told 7.30.
“We’re rolling out 121 stations across our network initially, in partnership with ARENA.”
Despite Ampol’s 1 million tonnes of carbon emissions each year, it is part of a business delegation called the Climate Leaders Coalition — which includes BHP, CBA and Coles — and has sent representatives to Glasgow.
“I don’t think it’s appropriate to rely on any one group, government or organisation. It’s about a coalition working across value chains, working together on policy settings,” he said.
The rise of ‘greenwashing’
Increasingly, carbon-intensive businesses like Ampol — who pledge to deliver net zero on emissions by 2040 — will come under the microscope.
Critically, Ampol’s plan will not deal with “scope 3” emissions — the emissions from customers burning their fuels — according to Richie Merzian.
“And if you’re a major fossil fuel producer, the majority of your emissions are when your goods are burnt.
“We’re seeing a rise of greenwashing. We’re seeing more junk credits being put on the market and purchased up by big polluters. We’re seeing a lot more marketing, and not a lot of action. And that’s the real risk.”
In Australia, one in five carbon credits generated here could very well be hot air, according to new research by the Australian Conservation Foundation.
However, COP26 will see new commitments from some of the industries hardest to abate.
World’s largest cement maker tackles scope 3
Holcim is the world’s largest cement and building material producer. It’s also a member of US climate envoy John Kerry’s First Movers Coalition, a group of emissions intensive industries attending COP26.
Holcim’s chief sustainability and innovation officer, Magali Anderson, told 7.30 that the new targets they were taking to COP26 meant they would now reduce their scope 3 emissions — emissions created down their supply chain by customers using their building products — by 90 per cent, a goal endorsed by the Science Based Target initiative (SBTi).
“[For] some companies, it represents 80 to 90 per cent.
“Which means 80 per cent of our emissions are actually under our control.
“Steel and cement are part of this famous ‘hard to abate’ sector. Myself, I hate this nomination; I love to call it [a] ‘full of opportunities’ sector, because whenever we reduce, the type of reduction we’re going to make will have an enormous impact.”
Mr Cannon-Brookes, whose software firm Atlassian also has endorsement from SBTi, said COP26 would bring new promises from the corporate sector, but transparency and governance was required.
“We need to call out and be clear about what people are actually committing to, whether it’s an individual, whether it’s a business or whether it’s a government,” he told 7.30.
“When people are making a net zero pledge, we should ask things like, is it legislated? As a government, that’s laws, as a business, that’s in some sort of actual policies, penalties, incentives, that sort of thing.
“None of Australia’s policies involve scope 3. Very few of those large, generally fossil fuel-based businesses involves scope 3. That’s a really important point.”
‘Sniffing the cash’
Attempting to address the authenticity of green investments, the Climate Bonds Initiative is a not-for-profit that developed an accreditation system now adopted by the EU and China — and investors are hungry for ways to ‘green up’ their portfolios, according to CEO Sean Kidney.
“There is money pouring out of our ears looking for green,” he told 7.30.
“In the recent auction, when the European Commission went to market seeking money for its green bond, they were 11 times oversubscribed.
“That means that they placed 12 billion euros a bond. They got 11 times the orders.
“This COP26 will be replete with corporations, with investors, with ministries of finance, not just ministers of climate change.
