Telstra flags $50m bushfire hit, calls for climate action

Telstra CEO Andy Penn says bushfires will cost the company $50m, issuing a call to put climate at the top of the national agenda.

Telstra CEO Andy Penn. Picture: AAP

Telstra has copped a multimillion-dollar hit from this summer’s bushfires, with the telco’s chief executive Andrew Penn urging concerted action on climate change.

Speaking at the American Chamber of Commerce lunch on Thursday, Mr Penn described a changing climate as the biggest challenge of the 2020s, citing the recent bushfires as a wake-up call for Australia.

“With lives lost, homes burned, wildlife destroyed and whole ecosystems changed forever, climate change and our environmental footprint must sit at the top of our change agendas,” he said/

“We estimate the total impact of the bushfires on Telstra will be in the order of $50m.”

However, Mr Penn stopped short of calling for a return of the carbon tax, introduced by the Gillard Labor government in 2011, which was subsequently repealed by the Tony Abbott-led Coalition government.

“I don’t want to comment on policy frameworks but climate change is the responsibility of all of us, whether it’s the government or businesses, and us as individuals can take a stronger role in understanding our own carbon footprint,” he said.

“Emissions output of all organisations is a reflection of consumer demand, so I think this needs to be a collective effort.”

Mr Penn’s comments come on the back of Telstra’s ongoing tension with the Business Council of Australia over the industry lobby group’s stance on climate change, with the telco warning last year that it was reviewing its involvement with the group.

He reiterated on Thursday that Telstra and BCA did not see eye-to-eye on the issue.

“We undertook an exercise late last year, which was prompted by comments made by the BCA, which we felt were not consistent with how we felt about climate.”

“We are member of a number of business bodies and it’s important that if we have a set of values then they need to be aligned with them,” he added.

Telstra is one of the largest consumers of power in the country and Mr Penn said the telco had made reducing it overall consumption a key priority.

“With the volume of data on our network increasing 30-50 per cent per annum, the upward pressure on our energy consumption is considerable,” he said.

“We are managing this by using a bigger proportion of renewables and underwriting more renewables by investing solar and wind farms, as well as making our networks more efficient.”

According to Mr Penn, those initiatives helped Telstra cut its emissions intensity by 24 per cent in financial year 2018, with absolute emissions falling 4 per cent.

In March 2019 Telstra announced plans to increase its purchase of renewable power generated by solar and wind farms.

Mr Penn’s call to arms on climate change was part of a broader warning to Australian businesses to shift their priorities from solely delivering returns to shareholders and instead become responsible corporate citizens.

“It is impossible today to view business as independent from society, particularly big business.”

Telstra recently found itself in the firing line for unfair sales practices in remote communities in South Australia, the Northern Territory and Western Australia.

Mr Penn conceded on Thursday that the telco had failed to fully address the issue internally.

“We identified there were some instances where our processes had not been followed by some front line staff.”

“We had not fully appreciated how the devices would be used … our assumptions were wrong and as a result some customers found themselves in situations where they were facing significant debts worth thousands of dollars, particularly in excess data charges.”

“It is an uncomfortable truth that our financial hardship and collections processes let us and some of our customers down,” he added.

The Australian Competition and Consumer Commission is currently investigating the issue to determine whether Telstra has breached consumer law and could see the telco face legal action.

The telco also last week scrapped its supplier chain financing option available to our suppliers after The Australian highlighted serious issues with the practice.

Telstra is also changing its supplier payment terms, reducing the time frame to 20 days for 85 per cent of its supplier base.

He added that the recent measures highlight Telstra’s willingness to learn from its mistakes.

“At Telstra I believe we get it right 99 per cent of the time and I am extraordinarily proud of the services Telstra provides our customers and the contribution we make to society.”

“I also know that the one percenters matter, I have learned the hard way that a lot can go wrong in that last 1 per cent.”