By Peter Milne
Moving rocks once again took a back seat at iron ore miner Fortescue’s annual general meeting as chair Andrew Forrest lambasted the lack of climate action from the rest of Australia’s corporate leadership as either lazy or protecting vested interests.
Forrest’s address in Perth on Tuesday marked two years since he surprised shareholders with a commitment that Fortescue would achieve net-zero emissions by 2040, a decade ahead of competitors.
Andrew Forrest has spent much of the past two years travelling to build his green hydrogen business, including to the World Economic Forum in Davos, Switzerland in May.Credit: Bloomberg
Since then, Australia’s second-richest person has brought that deadline forward to 2030 and added a new arm to the company – Fortescue Future Industries – to make green hydrogen and develop clean energy technology for mining operations.
Forrest seemed to realise he has to temper his moonshot-like green ambition with reassurance for the many shareholders who signed up for a mining investment, although his words may not have been as soothing as he wished.
He thanked Fortescue employees for “pursuing almost a hopelessly brave plan A, but always with a bulletproof plan B because plan As – if they’re any good – often fail”.
Forrest is perhaps unique in corporate Australia in that his language about climate change matches the scope and urgency of the problem that is now well-established by science.
“Atmospheric year 2022 was a disaster,” he said about numerous extreme heat events around the globe this year. “The heating climate is coming to you.”
He had a dim view of the motivation of company leaders with less ambitious climate plans.
“I’d say it’s one of just two reasons,” he said.
“Either you have a vested interest; I’d like to meet that vested interest, is it truly worth more to you than your children?
“Or perhaps ... you’re simply lazy enjoying all the trappings of office but not doing much at all.”
Forrest said Fortescue was “the only industrial company to stop the greenwashing and just step beyond fossil fuels to save our kids”.
Fortescue could not be accused of the common greenwashing tactics of minimising damage from fossil fuels or deflecting the discussion into an ill-defined worry about energy security triggered by curtailed oil and gas supply from Russia.
However, there are legitimate questions about the ability of a miner to turn into a technology development company and when demand for green hydrogen – an emissions-free fuel made with water and renewable energy – will become significant, and at what price point.
Forrest announced that all executive bonuses would be linked to achieving emissions reductions but was unable to provide details when asked after the meeting beyond “it’s going to be very meaningful”.
Unlike last year’s AGM, Forrest did not neglect to mention iron ore, the business that will bankroll Fortescue Future Industries with 10 per cent of its net profit after tax.
The mining division has not had a chief executive since August when Elizabeth Gaines stepped down from running the entire company to become a non-executive director.
Forrest stepped in as executive chairman and has Mark Hutchinson as FFI chief executive, but the comparable role for mining is yet to be filled.
“We’re in no hurry, but I’m delighted with the standard of the candidature,” he said.
“I’ve come back in because we’re going through this phenomenal period of transition,” he said, comparing now to the “pressure cooker” of securing financing for Fortescue when it was a minnow.
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