Green Down Under?

There is a new government in Australia. Will it reverse the climate scepticism which seems to have been a hallmark of the previous administration? Here in the UK a responsible investment manager at a major financial institution takes an interesting slant on his job and gets suspended as a result. Questions are asked whether a charity with a view on climate science is in fact a charity or could it be a lobbying group? UK ministers have decided that now is not quite the time to require corporate environmental disclosure, inviting the question if not now, when? There's more bad news from Hinkley C, (I keep having to remind my spellchecker that there’s no ‘C’ in Hinkley - is that an omen?) but there’s a ray of sunshine from Oberlin, Ohio in the United States.

Changing Australian Climate

According to CNN, on his first day in Office the new prime minister of Australia mentioned Climate Change four times within two minutes of his maiden international speech at the QUAD meeting in Tokyo. This contrasts sharply with the antics of his predecessor, Scott Morrison, who once took a lump of coal into parliament. “This is coal,” he said, “Don’t be afraid, don’t be scared.”

These stories emphasise the Australian dilemma, where citizens are increasingly concerned about the effects of climate change, yet rely on coal and gas as major export earners and have one of the highest carbon footprints per head in the world. “Increasingly concerned”, but research by The Conversation found that approximately a third of Australians – predominantly conservatives – maintain that climate change is not caused by human activity, but rather by natural environmental fluctuations.

At the time of writing, the Australian Labor Party, the party of Anthony Albanese, the new prime minister, is still two seats short of an absolute majority after last weekend's general election. Even so, the ousted Liberals are way behind and the votes of the three Green members would more than fill the gap. There are also many committed environmentalists among the 12 independents. Will they support the new government? It must depend on how they honour their manifesto commitments.

Climate Crisis

The climate crisis was one of the defining issues of the election. You’ll find a link below to analysis of the individual parties’ claims by Carbon Brief. Labor promised to cut emissions by 43% by 2030 and to reach net zero by 2050, partly by strengthening the mechanism used to pressure companies to make cuts. Although this is an improvement on the policies of the outgoing government, critics warn that the chosen method will not have the desired result. It will be extremely difficult to turn away from China as a major export market for Australian coal and gas, and any reduction in mining will reduce jobs, so something will have to be put in place to replace them. We’ve heard in the past of the major infrastructure investments in ports and rail by the Adani group, designed to increase coal exports. How far can the new government go to roll back or cancel commitments already made? Albanese is reported as saying that Australia could become “a renewable energy superpower.”

Climate for Change

Australian pressure group Climate for Change says,

“We know that strong climate policies facilitate investment and create jobs, particularly in regional communities.

“We want the incoming government to take advantage of new opportunities in the clean energy economy, and we want to protect our communities and ecosystems from the worst impacts of climate change.

“We can’t afford to waste this opportunity - let’s get in early and let our new representatives know what we expect them to do.”

Labor Manifesto

The Australian Labor Party’s website says,

Energy

“Creating jobs, cutting power bills and reducing emissions by boosting renewable energy are at the centre of Labor’s Powering Australia plan. This plan will bring cheaper renewable energy to Australian homes and businesses.”

Environment

On the environment it says,

“An Albanese Labor Government will work to protect the Great Barrier Reef from the threats of climate change and poor water quality. We will work with local communities to restore the creeks and rivers that run through our communities and we will double the number of Indigenous Rangers working to protect some of our most precious places…

“…Unless we act now as a nation, our koalas will disappear, our Reef will be irreparably harmed, and the Australian way of life will change forever.”

Emissions

On emissions it is less clear. It acknowledges that emissions reduction will be a phased process, but now the party has responsibility for that process we await detailed plans.

I’m hoping to get on-the-spot comment from environmentalists in Australia for inclusion in an episode very soon.

Expert Opinion at HSBC

No worries about Climate Change

Last week Stuart Kirk, Head of Responsible Investing at HSBC Asset Management, made a presentation at the FT Moral Money Conference entitled “Why Investors need not Worry about Climate Risk”. He told delegates, “In 25 years in the finance industry, there’s always some nutjob telling me about the end of the world. Human beings have been fantastic at adapting to change, adapting to climate emergencies, and we will continue to do so. Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages and that’s a really nice place.”

He complained that he was being asked to look at “something that’s going to happen in 20 or 30 years.”

You can’t build an airport, a hospital or a motorway without looking 20 or 30 years ahead to assess the viability of the investment, so the implication is that Mr Kirk is only interested in short term quick profits. Hardly responsible investing.

Backlash

Backlash about his view of the climate crisis came from all quarters and Investment Week reported that Kirk was suspended from his role at HSBC over the weekend, even though his presentation had been signed off internally. Group Chief Executive of HSBC, Noel Quinn, said he did "not agree at all" with Kirk's speech, adding it was "inconsistent with HSBC's strategy and does not reflect the views of senior leadership”.

"Most Irresponsible"

Writing for ProfessionalAdviser.com, Christiana Figueres, formerly executive secretary of the United Nations Framework Convention on Climate Change, said, “The recent outrageous speech of Stuark Kirk, ostensibly the head of ‘responsible’ investing for HSBC Asset Management, was not only misinformed and misguided - his many fallacies have already been made clear - it is one of the most irresponsible public statements we have heard in years.”

Investment Week warned that the affair could seriously damage the reputation of HSBC, already under investigation by the Advertising Standards Authority for misrepresenting its green credentials. HSBC has for a long time been under criticism for continuing to finance fossil fuels. Even after announcing net zero plans at COP26 it was still assembling a $1.5 billion financing package for the Korean National Oil Corporation and a $290 million loan to the China Oil and Gas Group. Maybe Kirk’s presentation will be the final nail in the coffin of HSBC’s credibility, or maybe they will just ignore it, follow the money and crack on with business as usual. Seems to work for some people.

Cognitive Dissonance

As I understand it, cognitive dissonance is where you believe one thing but almost without realising it, you do the opposite. On the other hand, an example of doing the opposite of what you say you believe in on purpose, is called greenwash.

Red Tape

The British government, in common with governments all over the world, tells a really good story about tackling the climate crisis. However at the risk of a cliché, actions speak louder than words. Now we hear that the British government has postponed its plans to require corporations to disclose their environmental performance. City AM, Accounting Web and the FT all report that ministers decided to remove sustainability disclosure requirements (SDRs) from a financial services bill in the Queen’s Speech, the government’s legislative programme for the coming session, at the last minute. At the same time they removed measures for tightening standards of corporate governance, with audit reforms, new powers for the internet regulator and football regulator all dropped.

It is suggested that deputy chief of staff, David Canzini, a strong proponent of free-market economics was a key figure in delaying the new rules. He is believed to have tasked aides with postponing or dropping “unConservative” policies in order to highlight the party as pro-business while differentiating it from Labour.

"Let the planet burn"

Tax campaigner Richard Murphy commented: “When push comes to shove [the government] will say it cannot possibly impose burdens on business, who must be allowed to let the planet burn if that is what markets dictate,” while the Treasury stated that they “remained committed to implementing sustainability disclosure requirements and will proceed with the necessary legislation in due course”.

Will “due course” be soon enough? Nothing can be managed until it is measured, and by ruling out requirements to measure environmental impact the government has taken a step back from the path to net zero.

Global Warming Policy Foundation

Has the government been listening to the Global Warming Policy Foundation? This group has been questioning climate science for years. Led by former conservative chancellor Nigel Lawson, its membership includes Steve Baker MP who is also a member of the COVID Recovery Group, the pro-Brexit European Research Group and the Net Zero Scrutiny Group of MPs opposed to the UK’s green agenda. Craig Mackinlay MP, founder of The Net Zero Scrutiny Group, has recruited staff from the GWPF to work in his parliamentary office.

Lobby Group

It has been revealed that The Global Warming Policy Foundation, a charity, has received funding from fossil fuel interests. It has therefore been reported to the Charity Commission by the Green MP Caroline Lucas and Extinction Rebellion.

Climate campaigners say the questions about its funding mean it should be stripped of its charitable status.

In a letter to the Charity Commission, the signatories including the writers Irvine Welsh and Zadie Smith say the GWPF is “not a charity, but a fossil fuel lobby group”.

It certainly seems to be influential.

Hinkley C

Before I go, more news, sadly not very good news, from that new power station down in Somerset. EDF, who are constructing the nuclear station at Hinkley C, announced last week that the project is delayed by a further year and will cost an additional £3 billion.

Over time I have modified my view of nuclear power and I now believe that it is a necessary part of a low carbon electricity infrastructure. However, the fact that it takes so very long to build new stations counts against it, even more than the cost. Energy security from clean energy is an urgent priority. Surely scarce resources of materials and expertise should be channelled to wind farms and other renewables, which are so much quicker to construct.

And finally some good news

Oberlin

The City of Oberlin, Ohio, USA, has the Oberlin Environmental Dashboard. There’s a link to it below. You can see in real time how it is using electricity, consuming water and processing sewage and managing the local river. There are background presentations explaining what the data means and why environmental impact is important. Apparently other cities in the US are following this pattern. Cities world-wide please copy. After all, once you’ve measured something you can begin to control it.

And that’s it…

For this week. There will be another Wednesday interview next week when we're talking about the fashion trade and how it can be sure that every stage in its supply chain is ethical. There won't be a Sustainable Futures Report next Friday 3rd June because it's a public holiday in the United Kingdom in recognition of Her Majesty the Queen’s Platinum Jubilee. I'll aim to be back with another Wednesday Interview on 8th June, although that is yet to be recorded. Whatever you're doing between now and then I hope you enjoy it and are successful. Thank you as always for listening to the Sustainable Futures Report and a special thank you to my patrons. You too can become a patron and support this podcast, keeping it independent and ad-free. Details are at patreon.com/sfr.

Feedback and ideas are always welcome. Contact me via the website - sustainablefutures.report - where you will find links to the sources of all the stories in this episode and links to all the other 400+ episodes which I've published since 2007.

For the moment that was the Sustainable Futures Report.

I’m Anthony Day.

Until next time.

Sources