Recognition of Climate Risk Leadership
The Climate Alliance is now heading into its second decade of recognising executives and non-executive directors who are taking a lead in their organisations to govern and manage their climate risk. At last year's awards one of the highlights was hearing from Dr Mark Carney, formerly the Governor of the Bank of England and now the UN Envoy for Climate Change, as well as representatives from BHP and Toyota.
There is growing pressure on organisations to report on their carbon emissions and to be accountable for its impact. Carbon and climate risk disclosure is an important channel through which firms can demonstrate their oversight and accountability to stakeholders, and disclosure enables the business to operate in their markets in an efficient way. This has been at the core of the TCFD objectives.
For the past 10 years, the Climate Alliance Limited has held a national conference (in Sydney and/or Melbourne). Guest presenters were selected from industry or industry associations that were actively engaged in understanding and responding to climate related risks and opportunities in their business and demonstrating how they are dealing with climate risk and the knock-on transitional risks. In parallel to the national conference, over a period of 3 years, more than 40 private board room and public forums were held in Sydney and Melbourne with Dr Paul Fisher, formerly from the Bank of England and the UK Prudential Regulator.
With more than 20 awardees recognised over the past decade, Climate Alliance Limited has created a movement to recognise climate governance leadership. A set of published criteria with more than a dozen elements set the threshold for applicants to meet for 4 award categories.
Winner of Board Leadership Category
In 2019 the winner of the Board Leadership award was the Board of Farmers for Climate Action. Agriculture accounts for approximately 15 per cent of Australia’s emissions. Farmers for Climate Action is a movement of farmers, agricultural leaders and rural Australians working to ensure farmers are a key part of the solution to climate change. The Farmers for Climate Action board has supported farmers to build climate and energy literacy and advocate for climate solutions both on and off farm. They are independent, non-profit and non-partisan. They have helped farmers communicate with the public about climate change, which is critical as farmers are frequently recognised as some of the most trusted voices on climate change given their real world (lived) experience and traditionally conservative views on the environment. The current Chair, Lucinda Corrigan, also a farmer, has focused her leadership and passion on advancing action on climate change, overseeing the growth and direction of Farmers for Climate Action.
Winner of the Business Leadership Category
In this category, the 2019 winner was Andrew MacKenzie, immediate past CEO of BHP (McKenzie 2019). In July 2019, Mr MacKenzie gave a speech entitled “The Climate for Change – Confronting Complexity” at the Financial Times Conference in London, UK. As CEO, Mr Mackenzie announced a commitment to work with the shippers, processors and users of its products to reduce Scope 3 carbon emissions (these are the emissions generated by BHP’s clients processing BHP feedstock). To measure stewardship of BHP’s products, he committed the company to set public goals to address Scope 3 emissions in 2020. By undertaking to tackle Scope 3 emissions, BHP has led by example, not just on the ASX, but among listed entities globally. It is expected that this initiative will also have a material impact on assisting its customers reduce their emissions. Mr Mackenzie also committed the organisation to setting targets which link climate risk management to remuneration, the application of scenario analysis and disclosure, as well as setting up a fund of US $400 million for investment to reduce emissions across its value chain.
Risk Manager Leadership Category
In 2019 we had joint Risk Manager winners. The winners were Taryn Lane, General Manager, Hepburn Wind, and Salman Ikram ul Haq, Head of Risk, Medibank Private. Hepburn Wind Cooperative owns and operates a wind farm near Daylesford, Victoria. The Hepburn Wind Cooperative has over 2,000 members who raised most of the capital to build the 4.1 MW wind farm in 2011. Hepburn Wind’s journey since commissioning in 2011 has been a turbulent one with numerous risks posed to the business (White 2012). Hepburn Wind is a community-owned renewable energy cooperative, overcoming emerging risks and diversifying its generation portfolio to continue to meet its member’s expectations.
The second winner of this category was Salman Ikram ul Haq who is the Head of Risk at Medibank Private. He has led the integration of climate risk management into Medibank’s business. Medibank has taken a proactive approach to manage climate risk. Mr Ikram ul Haq has undertaken market scanning to benchmark Medibank’s risk profile against other financial services institutions in the context of climate change risk. He has embedded climate risk governance into its enterprise risk management framework to continually assess its impact on the delivery of the company’s services. In our view, this has gone beyond what other organisations are doing in the health insurance sector which has been lagging in its response to acting on climate risks.
Small Company Leadership Category
This award was made to Better Building Finance. Better Building Finance (BBF) is an initiative of the Sustainable Australia Fund. Since being established in 2015, it has partnered with more than 30 Victorian Local Governments to enable them to offer Environmental Upgrade Finance in their municipality. Environmental Upgrade Finance (EUF) is a new and growing way for businesses to fund environmental upgrade projects like solar, energy efficiency, retrofits, water and waste management. The agreement has enabled BBF to establish and administer the program for 30 Councils across Victoria with no upfront cost to Councils. BBF has seen $27.1 million invested in 54 projects, delivering a combined greenhouse gas (GHG) emission saving of 349,000 tonnes carbon dioxide equivalent over the life of all the projects. This represents good value for money in emissions abatement and enables energy users to access capital otherwise not readily available to them.
A Role for For-Purpose Organisations?
It is now evident that as many levers and sources of influences as possible or available will be required to move corporate action and to nudge government policy makers to set more ambitious commitments to addressing climate risks and capture value from the opportunities afforded by climate change. The work of non-for-profits such as the Climate Alliance Limited is important in contributing to the regulatory and non-regulatory framework of forces and influences that impact businesses and governments to lift national climate action ambition.
Climate Alliance Limited, has offered a recognition opportunity for corporates and government representatives over the past decade through its award program targeting climate change, and not broadly in environmental management and governance. It has also provided an annual forum to showcase leadership in how businesses are adapting to climate risks and creating new business opportunities and introduced the Australian community of business and corporate regulators to international leaders active in enacting climate policy reform.
The 2020 Challenge
Do you know of a person or an organisation who has demonstrated leadership in addressing the opportunities or risks presented by climate change? Then you can nominated for the Climate Alliance Business Leadership Awards using the form at the Climate Alliance Limited below.
Nomination categories include:
- Board Leadership of the Year
- Risk Manager of the Year (includes Company Secretary and CRO)
- Business Leader of the Year
- Small Company Leadership of the Year (includes Innovator/Exporter and Start-up)
See full details of the various criteria at the website.
Nominations for the 2020 Awards must be submitted by 30th October 2020.
Further Information
For more information on the recent presentations by Mark Carney, see the following link to the website.
About the Authour
Turlough Guerin is a senior leader in corporate environmental management, governance and sustainable development. He has program and project leadership experience in government, as well as the clean energy, mining, fuel supply, communications technology and construction sectors. Board highlights include Chair of the Board of Advisors on a climate and business advocacy forum, Chair Ag Institute of Australia, and is on the Governance & Risk Committee of the Board of Australia's largest community radio station.
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Opinions are those of the author, photographs and images are courtesy of 123rf and Laura Coutts and Climate Alliance.