Kylie Porter

The Australian local network of the UN Global Compact has urged business and the Federal Government to remain focused on the opportunities and threats presented by climate change by incorporating tougher action on carbon emissions as part of COVID-19 economic recovery plans.

Commenting on the release of a statement by leading global companies urging governments to align their COVID-19 recovery efforts with the latest climate science, Global Compact Network Australia (GCNA) Executive Director Kylie Porter emphasised the importance of maintaining a focus on climate action.

“There is a risk that the momentum that has been building around the climate change agenda will be lost as a result of the pandemic and we will remain off track to meet the targets set for 2030 and beyond,” Ms Porter said.

She said the Federal Government should consider establishing a Just Transition or Climate Change Authority to guide Australia to net zero while taking into account the livelihoods of Australia’s regional communities and economies that will be affected by the transition.

“We will need to harness the technologies that exist today to reach net zero. This might mean rethinking the subsidies offered to certain sectors of the economy, putting additional funding into renewable energy technology or re-shaping our grid.”

Ms Porter said this transition would be accelerated if the Government established a national climate and energy policy framework, introduced stronger market indicators and supported renewable energy targets.

She added that now is a good opportunity for the Federal Government to be bold and set policy initiatives that give business the confidence to scale up their efforts and ensure net zero emissions can be achieved well before 2050.

“This is an opportunity for our policymakers to shape a new Australia – one that ensures an equitable and sustainable future for all of us.”

The companies that have signed the aforementioned statement are all part of the Science Based Targets initiative (SBTi), and are calling for policies that will build resilience against future shocks by supporting efforts to hold global temperature rise to within 1.5°C above pre-industrial levels, in line with reaching net-zero emissions well before 2050.

In Australia, the SBTi program is run by the GCNA and WWF-Australia and has more than 30 listed companies actively involved in the initiative. Five Australian companies are among the signatories to the statement: Yarra Valley Water, Energetics, Edge Environment, Australian Ethical Investment, and Community Services.net Pty Ltd (CSnet).

Dermot O’Gorman, Chief Executive Officer of WWF-Australia noted in regards to the statement “The urgent need to act on climate change and rapidly transition to a zero carbon economy requires strong leadership from governments to set the right policy incentives that enable business and communities to innovate and drive the enormous opportunities for new jobs. WWF is working closely with GCNA to support Australian companies that align their businesses with the Paris Agreement’s commitment towards a 1.5°C future.”

The signatories to the Science Based Targets statement include some of the world’s biggest corporations, spanning 34 sectors, with headquarters in 33 countries. They include: Abdi Ibrahim Pharmaceuticals, ACCIONA, Accor, Adobe, Agder Energi, Arabesque, Arc’teryx Equipment, AstraZeneca, Auchan Retail Portugal, Beiersdorf, BIAL, Bonava, Cargotec, Carlsberg Group, Cellnex, CEWE Stiftung & Co. KGaA, City Developments Limited, CMA CGM, Coca-Cola European Partners, Corbion, Cranswick, Dalberg Advisors, Dalmia Cement (Bharat) Limited, Danfoss Group, Diageo, DIAM GROUP, dormakaba, Dutch-Bangla Pack, EcoVadis, EDF Group, EDP Energias de Portugal, Electrolux, En+ Group, Enel, ERM, Europcar Mobility Group, Ferrocarrils de la Generalitat de Catalunya, Firmenich, Gleeds, Glovo, Grundfos Holding, Grupo Red Eléctrica, H. Lundbeck, H&M Group, Henkel, Husqvarna Group, Iberdrola, ICA Gruppen, INDITEX, Ingka Holding, Inter IKEA Group, JLL, Kearney, Kelani Valley Plantations, Kuehne + Nagel Management, Legrand, Lojas Renner, Maeda Corporation, Magyar Telekom, Marshalls, Marui Group, Media 6, MP Pension, Nestlé, Nomad Foods, Novartis, Novo Nordisk, NR Instant Produce Public Company, O. T. Sports Manufacture, Orange, Orbia Advance, Orkla, Ørsted, Pearson, PensionDanmark, Pernod Ricard, PVH Corp., Refinitiv, Ronald Lu & Partners, Royal DSM, RSE (Ross-shire Engineering), Safaricom, Saint-Gobain, Scania, Scapa Inter, Schneider Electric, Schüco International, SIG Combibloc, Signify, Sky, SkyPower Global, Sofidel, Sonae Sierra, Sopra Steria Group, Stora Enso Oyj, SUEZ, Symrise, Syngenta Group, Takasago International Corporation, Talawakelle Tea Estates, Tech Mahindra, Telefonica, The Co-op, The Lux Collective, TMG Automotive, Unilever, Vattenfall, Vaude Sport, Verbund, Vestas Wind Systems, Vodafone Group, Wipro, Yarra Valley Water, YKK Corporation, and Zurich Insurance Group, amongst others.

These companies have already set, or committed to set, science-based emissions reduction targets. By signing the statement, they are reaffirming that their own decisions and actions remain grounded in science, while calling on governments to “prioritize a faster and fairer transition from a grey to a green economy.” Policy and spending that incorporates climate targets will reduce vulnerability to future shocks and disasters, create good jobs, reduce emissions and ensure clean air, according to a study from Oxford University.

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Kylie Porter

The United Nations-affiliated Global Compact Network Australia has urged CEOs to become more outspoken on issues such as climate change, or risk reputational damage to their business and long-term decline in revenue.

“The time for quiet is over,” according to the GCNA’s 2020 Pressures Report. “Leaders who speak up, who authentically match words with action and drive societal change will reap the benefits.”

“Authentic public action will raise a leader’s visibility, reinforce social licence to operate and demonstrate action beyond business as usual,” the report says.

Conversely, business leaders who remain quiet will find themselves “outcompeted by purpose driven leaders and companies.”

“Their silence will likely lead to reputation damage, loss of customers and long term decline in revenue.” The report says Australian business leaders could learn from those who had already spoken out such as BHP’s former CEO Andrew McKenzie, who publicly described climate change as “an escalation towards a crisis”.

Those leading the charge internationally included Starbucks CEO Andrew Johnson who closed all of the company’s stores to conduct racial bias training in order to tackle systemic racism. GCNA executive director Kylie Porter said that while pressure on CEO’s to take a public stance on social and environmental issues had been mounting, the impetus was growing due to increasing public awareness and activism.

“There is a real opportunity for businesses to tap into the public groundswell and take the lead where governments have fallen short,” she said.

“Shareholders, consumers and employees want to trust the organisations they engage with and they expect their leaders to have views on issues such as climate and human rights and be prepared to voice those views publicly.”

Climate change and its impact on human rights heads the GCNA’s list of key pressures facing Australian business.

Other key pressures facing corporate leaders are:

• Compliance with the Commonwealth Modern Slavery Act with businesses being judged on how they are responding to the risks of modern slavery and human trafficking in their supply chain.
• Effective water governance and management to ensure “mature stewardship of vital water resources.
• Adequately managing the risks associated with the transition to a net zero carbon economy by 2050.
• The need to rebuild trust through effective communication, particularly with influential Generation Z, estimated to account for 40% of global consumers by the end of 2020.

“Businesses no longer have the luxury of time,” the report says. “They must step away from a business as usual approach and reposition themselves as more responsible and sustainably savvy.”

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