The Australian’s 2021 CEO Survey: Heavy emitters do the heavy lifting
One way or another, every one of the 85 chief executives taking part in The Australian’s CEO Survey is engaged in the carbon emissions challenge.
One way or another, every one of the 85 chief executives taking part in The Australian’s CEO Survey is engaged in the carbon emissions challenge. To have a social licence to operate they have to be.
From their responses, however, something has changed.
After a barrage of climate change activism, CEOs are gaining traction in their efforts to convince shareholders, financiers and the public that economies cannot transition to a net zero emissions world by abandoning high carbon emitters in favour of bright green assets.
The big gains in emissions reduction will come from supporting businesses in their transition away from fossil fuels.
CEO Survey: Top 10 firms reveal their biggest issues
Passionate ESG industry fund HESTA is part of Climate Action 100+ and was the first major super fund to commit to net zero by 2050. CEO Debby Blakey says HESTA is committed to deepening its engagement with the mining sector to understand how they can implement net zero. “We believe sudden, wide-ranging divestment won’t achieve a just and timely transition to a low-carbon economy,” she says.
ANZ’s Shane Elliott says: “Not all of this is about stopping things. There is enormous opportunity for growth through this process and ANZ is well-positioned to help our customers approach that opportunity.”
Within Macquarie Group, CEO Shemara Wikramanayake says the world’s largest infrastructure asset portfolio is being managed with a commitment to net zero emissions by 2040. “In doing that, we are holding the assets in hard-to-abate sectors and working with them on detailed transition plans that address emissions while also diversifying their activities and preserving jobs and essential services,” she says.
The concrete industry is another high carbon emitter making profound changes beyond just flicking over to renewable energy for power. Boral chief Zlatko Todorcevski is reweighting the production to a much lower carbon concrete. “Our premium lower carbon products also deliver better engineering outcomes for our customers, so it’s a win-win,” he says.
When a coal-fired power station shuts permanently, the drop in emissions is huge – a point not lost on AGL’s Graeme Hunt. Next year he is demerging AGL. New business Accel Energy will house the coal-fired power stations, sites that will be changed to low-carbon industrial energy hubs. “The commercial reuse of our resources will support economic diversification of the region and build off our site infrastructure,” Hunt says.
At EnergyAustralia, Mark Corlette has brought forward the closure of Yallourn to mid-2028 and has new projects in batteries, pumped hydro, gas and hydrogen.
Other fossil fuel companies are using scale to drive transition: the Santos takeover of Oil Search and the merger of Woodside and BHP’s petroleum business, approved by the ACCC on Thursday.
“The increased cashflows from the proposed merger would provide flexibility with how we allocate capital in the future, supporting our target $5bn new energy investment this decade,” says Woodside’s Meg O’Neill.
The most dramatic reinvention is at Fortescue, from a pure play iron ore producer to a green renewables and resources company. After three impressive years running the miner, CEO Elizabeth Gaines said last week she will step down as Fortescue Future Industries takes centre stage pioneering hydrogen and green energy.
Change for heavy emitters is not easy. Without credible net zero targets, APA’s Rob Wheals believes it will only become harder to access cost-effective capital, both debt and equity. But many of them already have targets in place.
In October the Business Council of Australia committed to net zero by 2050, which left the federal government isolated ahead of COP26 and doubtless gave it a nudge.
CEO Survey: Companies from A to B
CEO Survey: Companies from C to I
CEO Survey: Companies from J to Q
CEO Survey: Companies from R to Z
RBA leaves all options on the table in inflation fight
Despite keeping interest rates on hold at its September meeting, the RBA left the door open for additional tightening in its efforts to tame inflation, minutes show.
Financial stress at ‘alarming levels’: AMP
Two thirds of Australians are enduring extreme levels of financial stress, analysis carried out by AMP has found, with those nearing retirement the most worried.