CLIMATE NEWS NETWORK - Though Australia is considered one of the countries most vulnerable to the vagaries of a changing climate, very few in the Australian corporate sector pay much attention to the issue says a report focusing on business attitudes in the country.
Australian companies appear to be struggling to move forward in responding to climate change impacts, apparently paralysed by short-term profit-first thinking, uncertain political risks and a corporate culture unused to volatility and disruption, says the report.
The study, funded by the Australian Government’s National Climate Change Adaptation Research Facility, says that though more than 100 companies were grilled at length on climate change, it’s clear very few give much weight to the issue, either in terms of corporate planning or in assessing future risks to their businesses.
“The private sector’s failings in assessing and managing existing climate risks are becoming increasingly evident”, says the report. For example, in the transport sector, very little is known about the potential impacts of climate change – further research is urgently required to explore and manage the potential for what the report describes as the considerable cascading effects of changes in climate, especially on the tourism sector.
Property Vulnerable To A Rise In Sea Levels
Meanwhile the property and real estate sector faces “a phenomenal challenge”, with an estimated A$81bn (£54bn) worth of property vulnerable to a rise in sea levels, and more than half a million homes at risk of floods. Much of Australia’s infrastructure is aged, says the report, and has not been designed or operated with climate change in mind.
The study questions the role of the Australian Government: on one hand it expects the private sector to adapt to climate change, yet on the other it gives few, if any, incentives to promote changes in corporate behaviour. Australian companies are missing out on opportunities and innovations associated with climate change while Asian-owned mining, gas and technology business are cashing in.
The report notes that the insurance industry can act as an economic shock absorber and underpins much of present-day economic activity.
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“…Climate related events are causing an increasingly disproportionate percentage of payouts”, it says. The costs of insurance are going up – and in some instances businesses might find their activities can no longer be insured.
Electoral Tussle Ahead
The study also highlights what it calls the legal imperative which should be driving businesses to adapt to climate change.
“One of the key legal findings from the research is that corporations need to identify their climate-related risk, and, once quantified, ensure that such risk forms an integral part of their environmental risk management process”, says Mark Baker-Jones, one of the report’s authors.
A separate report released in London earlier this month warned of the risk of investing in mining and other companies which have assets that ultimately – if climate change is going to be tackled – might have to stay in the ground.
On a per capita basis Australia is one of the world’s leading greenhouse gas emitters, mainly due to its giant coal mining industry. Noting an increase in extreme heat waves, flooding and bush fires in recent years, the Government’s Climate Commission has called for fast and deep cuts in emissions in order to cope with future changes in climate.
Climate change is likely to be a key issue in federal elections scheduled for later this year. Tony Abbott, leader of Australia’s main opposition Liberal Party – in the past he has dismissed climate change science as “crap” – has vowed to repeal a carbon tax introduced last year by the ruling Labour Party, headed by Prime Minister Julia Gillard. He has also promised to repeal a tax on mining activities. – Climate News Network