Discussion paper

The company you keep: how the Business Council of Australia trails behind its member companies on climate

Energy Energy industries Climate change mitigation Renewable energy Emission reduction Australia

The Business Council of Australia (BCA) represents large companies operating in Australia. The Council claims to support the Paris climate agreement, yet has described an emissions reduction target of 45% by 2030 in the power sector as “economy wrecking”. To be in line with Paris, Australia must reduce emissions by at least 45% by 2030 across the economy.

The BCA’s opposition to emissions reduction beyond existing targets is contradicted by the actions of many of its members. BCA member companies have adopted ambitious targets and policies on renewable energy, emissions reduction and other initiatives.

At least 14 curret BCA members have adopted renewable energy targets of 100%, eight by 2020 and the others before 2030. Some of these are IT companies that run large server centres that require significant amounts of power, such as Google, Microsoft and SAP. Others are financial services companies, such as Commonwealth Bank, Goldman Sachs and Citigroup. Non-BCA members have made similar commitments, such as Carlton United Breweries.

Other BCA members with substantial renewables commitments or purchases include BlueScope Steel, Snowy Hydro, AGL, Sydney Airport (75% wind) and Coca Cola Amatil (60% target by 2020). Former BCA member, Onesteel, has announced plans for 1GW of dispatchable renewable energy.

Seven BCA members have climate targets accredited as being in line with the Paris Agreement by the Science Based Targets Initiative (SBTI). All of their emissions reduction targets are well in excess of those proposed by Australia’s Government or Federal Opposition, including News Corp, McDonalds and Philip Morris.

Beyond SBTI, at least 56 major companies across Australia and New Zealand had set emissions reduction targets for their operations, including BCA members such as Amcor, ING and Orica. Some BCA member finance companies have committed to not fund emissions intensive projects, including NAB, ING, HSBC, and JP Morgan Chase.

BCA members are part of the Climate Action 100+ (CA100+), a coalition of 310 investors with more than USD $32 trillion in assets under management calling for companies to assess and disclose carbon risk from policies in line with the Paris Agreement, set emission reduction targets “consistent” with the Paris Agreement, and ensure lobby group activities do not undermine the goals of the Paris Agreement.

BCA members in CA100+ include AMP Capital, BNP Paribas Asset Management and UBS Asset Management. CA100+ also includes major Australian superannuation funds including AustralianSuper, HESTA, Unisuper and Local Government Super.

Other BCA members are involved in other ‘Investor Governance Networks’ advocating on climate change ambition. These networks have issued statements of expectations for companies, stating that companies should pressure lobbying groups to stop undermining the Paris Agreement, or leave. Between these IGNs and CA100+, at least seven BCA members have backed public commitments of the sort.

BCA members include research and education organisations that have written extensively on climate, in particular the CSIRO, as well as the Business Schools at Melbourne University, USYD, UTS and QUT.

In the last year, several companies with strong climate credentials have left the BCA. This includes Unilever, a global corporate leader on climate change, Engie, following the closure of the Hazelwood coal fired power station, and IAG and Goldman Sachs, both of which claim to have achieved carbon neutrality.

The BCA’s problematic position on climate appears to be driven by its Climate and Energy Committee. This committee is dominated by fossil fuel producers and other high emitters such as BHP, Origin, Santos, EnergyAustralia, Chevron, ExxonMobil, BP and Shell. BCA’s climate leaders are conspicuously absent from this committee.

The BCA is internally conflicted on climate change. While some members are taking strong climate action, others, particularly its Climate and Energy Committee, are obstructing higher ambition.

BCA members taking action within their own operations should consider whether their interests are well served by BCA’s advocacy against climate ambition. They should seek to reconcile this contradiction. They could seek to join the Climate and Energy Committee and steer BCA’s public position towards supporting ambition, or principled neutrality, a position it has previously held. Alternatively, they could leave the BCA.

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