New green industry policy agenda | Climate Governance Forum 2024 registrations open

Thursday, 18 April 2024


    This month, Prime Minister Anthony Albanese announced a 'Future Made in Australia Act' that will directly support green industry and the energy transition, echoing the United States Inflation Reduction Act (IRA). The government also introduced the Net Zero Economy Authority bill and mandatory climate reporting legislation, with the latter proposed to take effect from 1 January 2025.

    Registrations have opened for Australia's largest gathering of climate governance leaders and experts. The AICD’s Climate Governance Forum will be held in Sydney on Friday, 23 August 2024 with virtual attendance available. The Forum comes at a critical time for organisations as many move from ambition to execution of their climate goals, while also preparing for Australia’s incoming mandatory climate reporting regime. Register now.

    Also in this newsletter:

    • Climate Change Authority consults on 2035 emissions reduction target of 65–75%;
    • AGM season: Company climate targets make headlines;
    • Australia’s new national EPA; UK’s TPT releases 'build your transition plan' resources; US SEC postpones its climate disclosures; among other market developments;
    • Introducing CGI Australia Advisory Council members.

    Registrations open for the AICD’s Climate Governance Forum 2024

    The AICD’s highly popular Climate Governance Forum will return for a third year. The event will guide directors through the latest in climate and nature disclosures and transition planning advice, and provide insights into investor perspectives, not-for-profit strategy and more. The annual Forum has become the go-to event for directors in all sectors needing to stay up to date in a rapidly evolving field and network with peers. The event will be held online and at the ICC Sydney on Friday, 23 August 2024. Speakers and panelists will be announced shortly. Register now.

    Australian Government announces green industry policy

    In a major pre-budget address last week, Prime Minister Anthony Albanese announced the government will introduce a ‘Future Made in Australia Act’ that brings together a range of new and existing measures to support the country to ‘industrialise and decarbonise’. The policy follows the lead of the United States, Europe, Japan, and Canada by intervening in the industrial base, including investments in hydrogen, green metals and advanced manufacturing. It has received a mixed response from business and industry, with the Productivity Commission chair cautioning against supporting any industries that ‘don’t have a long-term competitive advantage’.

    This follows the introduction in March of legislation to enact the Net Zero Economy Authority. Former Labor climate change minister Greg Combet and incoming chair of the $212 billion Future Fund has led the establishment of the new statutory authority since last year. In a speech to the National Press Club, he said the authority will 'promote the orderly and positive economic transformation of Australia’ as the world cuts greenhouse gas emissions and fossil fuel dependence.

    The AICD's Climate Governance Study 2024 recommended policy makers address policy complexity, by providing an overall picture of the various strands of climate policy that underpin legislated emissions targets, and support the development of mechanisms to ensure fair distribution of costs, fostering industry-wide participation.

    Mandatory climate reporting legislation introduced to Australian parliament

    Following extensive consultation, the Australian Government introduced its mandatory climate reporting bill into Parliament (Bill) on 27 March. The Bill responds to AICD and other stakeholder concerns by including significantly strengthened three-year modified liability and directors’ declaration provisions. Key points:

    • The mandatory climate reporting regime is now proposed to commence from 1 January 2025 for the largest organisations
    • The Bill retains a phased approach to disclosure, starting with the largest emitters, companies and financial institutions, and extending to all within scope entities by July 2027.
    • It provides for a three-year modified liability period of regulator-only enforcement for transition plans, scenario analysis and scope 3 disclosures.
    • Modified liability will apply to subsequent publication of legally required updates or corrections to the original Sustainability Report.
    • The Bill provides for a qualified directors’ declaration for the first three years of the regime.

    The AICD considers the approach set out in the Bill strikes a sensible balance and will help encourage more fulsome disclosures in particularly uncertain areas. Read more.

    Climate Change Authority consults on a 65–75% emissions reduction target for 2035

    The Climate Change Authority has released an issues paper, Targets, Pathways and Progress, which presents evidence to support an economy-wide emissions reduction target in the range of 65 to 75 per cent by 2035, on 2005 levels. Parties to the Paris Agreement, including Australia, are expected to update their nationally determined contributions (NDCs) in 2025 to include a 2035 target. Australia’s legislated NDC commits the country to a 43 per cent emissions cut by 2030 and net zero emissions by 2050.

    This year, the CCA will be advising government on Australia’s 2035 emissions reduction target and presenting six sectoral pathways to support Australia achieve net zero by 2050 (electricity and energy, transport, industry and waste, agriculture and land, resources and the built environment). Consultations on the CCA issues paper are open until Tuesday, 14 May 2024.

    TPT ‘build your transition plan’ resources available

    The UK’s Transition Plan Taskforce has released its final set of transition plan resources to support business to unlock transition finance for net zero. The TPT was announced at COP26 in Glasgow and has spent the past few years creating an internationally recognised disclosure framework for transition planning. The new materials include:

    • sector-specific transition plan guidance for asset owners, asset managers, banks, electric utilities and power generators, food and beverage, metals and mining, and oil and gas;
    • sector summary guidance, with high level guidance for 30 sectors of the global economy; and
    • guidance on the how to undertake a transition planning cycle.

    Chapter Zero UK, which is part of the Climate Governance Initiate network, is hosting a director webinar with the London Stock Exchange Group on ‘How to move transition planning forward from the boardroom’. It is free to register.

    New dates announced for AICD climate short course

    The AICD’s Climate Governance for Australian Directors short course is a four-week facilitated course delivering comprehensive insights into the developing climate-related obligations and opportunities for directors in Australia. The first five courses booked out fast and have attracted wide member interest. New dates have been announced for July, August and September. Secure your place.

    Get up to speed with our free climate E-learning module

    The Introduction to Climate Governance e-learning module is free for members and is a valuable starting point on a director’s climate governance journey.

    Market developments update

    • US appeals court temporarily halts SEC climate-disclosure rules: The Wall Street Journal reports that the Fifth US Circuit Court of Appeals placed a temporary halt on new Securities and Exchange Commission (SEC) rules that require public companies to disclose climate-related risks. This ‘administrative stay’ was granted following multiple lawsuits challenging them, including those filed by Liberty Energy, Nomad Proppant Services and the US Chamber of Commerce.
    • Australia’s Nature Positive Plan: Minister for the Environment and Water Tanya Plibersek announced the second stage of the Government’s Nature Positive Plan, which includes the establishment of a national Environment Protection Agency and a new body to provide business with easier access to environmental data but delays an overhaul of the Environment Protection and Biodiversity Conservation Act.
    • Rio Tinto engages on scope 3: In the leadup to its AGMs, Rio Tinto has released a statement on the company’s commitment to ‘enhance disclosure on plans to reduce scope 3 emissions from processing iron ore,’ following engagement with investors and civil society organisations.
    • Investors challenge Woodside Energy’s CTAP: At its AGM on 24 April, Woodside's chair and board are set to face a challenge to the company’s climate target action plan (CTAP) from some investors when it voluntarily puts its climate disclosures to a vote of shareholders. Central to the challenge is the question of whether its proposed oil and gas projects can align with Paris Agreement temperature goals. There are also some prominent proxy advisers recommending shareholders vote against the re-appointment of the Woodside chair, representing a new development in local market climate activism.
    • At its April AGM, Santos Chair Keith Spence experienced a minor vote against him of 6.6 per cent. HESTA notably voted against the re-election of directors on the company’s sustainability committee with predominately oil and gas backgrounds.
    • The Financial Times reports that Shell has weakened several of its climate targets to accommodate plans to grow its gas business, including removing its 2035 emissions reduction target. The company has maintained its net zero by 2050 goal.
    • SBTi’s (Science Based Targets initiative) reputation tested: The UN-backed SBTi is the main global standard-setting body for corporate climate targets. The SBTi board of trustees experienced a staff revolt this month when it announced it would permit carbon offsets for mitigating scope 3-related emissions beyond the current limits set by the organisation. The SBTi board has committed to releasing a clarifying discussion paper in July.
    • ASIC chalks up first greenwashing court win: ASIC announced in March it had won its first civil greenwashing action. The Federal Court found Vanguard Investments Australia contravened the law by making misleading claims about certain environmental, social and governance (ESG) exclusionary screens applied to investments in a Vanguard index fund. ASIC Deputy Chair Sarah Court said, ‘By Vanguard’s own admission, it misled investors on a number of its claims.’
    • Meanwhile, ASIC Chair Joe Longo told directors at the AICD Australian Governance Summit that access to climate-related information from company value chains ‘can support you in better managing climate change-related risks and opportunities, and in potentially preserving or enhancing shareholder value.’
    • APRA will commence a voluntary self-assessment survey regarding the maturity of regulated entities in managing the financial risks of climate change. Entities will be invited to complete the survey via an online questionnaire. This second round of the climate vulnerability assessment will expand beyond the largest banks to also cover insurers and superannuation funds.
    • The Australian Government announced $1 billion in new funding to establish the Solar Sun Shot program to kick-start solar photovoltaic manufacturing in Australia.
    • The government also released its National Energy Performance Strategy (NEPS), to provide a national framework for improving Australia’s energy performance, investing of $15.2 million to 2026 and plans for new vehicle efficiency standards were also released, with the aim to reduce new passenger vehicle emissions by more than 60 per cent by 2030.

    Introducing the Climate Governance Initiative Australia Advisory Council

    The AICD is the proud host of the Climate Governance Initiative Australian chapter. The Climate Governance Initiative (CGI) seeks to mobilise boards around the world to accelerate the net zero transition. The CGI is active in 71 countries and brings together a global network of 30 chapters that promote the World Economic Forum (WEF) Climate Governance Principles for boards within their jurisdictions.

    As part of the global network, CGI Australia works constructively to engage and educate the Australian director community, informed by advice from experts.

    CGI Australia is overseen by an Advisory Council of majority non-executive directors, and which includes representatives from AICD as host, and five partner organisations. The Advisory Council is a singular body which replaces the previous CGI Australia Steering and Advisory committees.

    Advisory Council members comprise:

    Non-executive directors

    • Geoff Summerhayes GAICD (Chair)
    • Penny Bingham-Hall FAICD (Deputy Chair)
    • Jillian Broadbent AC
    • Michael Coleman FAICD
    • Ken Dean FAICD
    • Naomi Edwards FAICD
    • Andrew Fraser GAICD
    • Ming Long AM GAICD
    • Diane Smith-Gander AO FAICD
    • David Thodey AO FAICD
    • Michael Ullmer AO FAICD
    • Dr Katherine Woodthorpe AO FAICD

    AICD (host) representatives

    • Louise Petschler GAICD
    • Christian Gergis GAICD
    • Partner representatives
    • Timothy Stutt/Mark Smyth (Herbert Smith Freehills)
    • David Rodgers/Rebekah Cheney GAICD (Deloitte)
    • Jon Chadwick GAICD (PwC)
    • Paul Schoff MAICD/Keith Rovers (MinterEllison)
    • Zoe Whitton/Sarah Barker MAICD (Pollination)

    We thank all members for offering their time and expertise to the Advisory Council, and acknowledge retiring members Dr Don Russell, Maxine Brenner MAICD and Joe Morrison for their valued contributions since 2021.

    For more information, visit the CGI Australia website or contact the CGI Australia lead Kulja Coulston.

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