By Lisa Cox
Australian companies are not doing enough work to model the risks of climate change and how it will affect their profitability, a new report by a thinktank says.
Progressive thinktank the Centre for Policy Development says that while most companies have committed to considering what climate change and the Paris climate agreement means for their business strategy, too few have begun using scenario analysis techniques to model what its impacts could be and how to respond to it.
Australia’s financial regulator stepped up its warnings last year that climate change posed a risk to the financial system and urged companies to adapt.
The Financial Stability Board’s Taskforce on Climate-Related Financial Disclosures has identified scenario analysis as a critical tool for companies and investors that are serious about responding to climate risks.
CPD policy director Sam Hurley said while many companies had said they will commit to modelling the impacts of climate change and potential responses for their business, few had actually started to undertake that work.
He said Australia was potentially exposed to large risks due to climate change, but there were also opportunities.
“Scenario analysis is going to be a really important driver of better strategies and of better outcomes for businesses that are preparing for these risks and opportunities,” he said.
“Some organisations in Australia have made a start doing that kind of analysis and more have committed to it.
“But what we’re going to need to see is more consistent, ambitious scenario analysis so that markets and investors have more accurate information when assessing how well companies are placed for transition to a zero-carbon economy.”
Hurley said, internationally, more organisations had begun considering how major emissions reductions and changes in policy as a result of climate change could affect their business and its profitability.
He said some of Australia’s biggest companies in the financial and resources sector already had sophisticated models in place for thinking about climate change and more needed to follow suit.
Companies that didn’t could expect scrutiny from their shareholders, as well as regulators.
“The period for words on this is over. What we really need to see over the next reporting season is companies walking the walk as well as talking the talk,” he said.
“Expectations around proper management of this issue are increasing and for companies that aren’t doing it, it’s going to be harder and harder to get away with it.”
Published on The Guardian on June 17, 2018
Human rights and environment
In recent years, the recognition of the links between human rights and the environment has greatly increased. The number and scope of international and domestic laws, judicial decisions, and academic studies on the relationship between human rights and the environment have grown rapidly.
Many States now incorporate a right to a healthy environment in their constitutions. Many questions about the relationship of human rights and the environment remain unresolved, however, and require further examination.
As a result, in March 2012 the Human Rights Council decided to establish a mandate on human rights and the environment, which will (among other tasks) study the human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment, and promote best practices relating to the use of human rights in environmental policymaking.
Mr. John Knox was appointed in August 2012 to a three-year term as the first Independent Expert on human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment. His mandate was further extended in March 2015 for another three years as a Special Rapporteur.
The resolution 16/11 adopted by the Human Rights Council on 12th of April 2011 entitled “Human Rights and the environment” requested the Office of the High Commissioner “in consultation with and taking into account the views of States Members of the United Nations, relevant international organizations and intergovernmental bodies, including the United Nations Environment Programme and relevant multilateral environmental agreements, special procedures, treaty bodies and other stakeholders, to conduct, within existing resources, a detailed analytical study on the relationship between human rights and the environment” (para.1).
See also the Special Rapporteur on the implications for human rights of the environmentally sound management and disposal of hazardous substances and wastes
Human rights and climate change
In its 5th Assessment Report (2014), the Intergovernmental Panel on Climate Change (IPCC) unequivocally confirmed that climate change is real and that human-made greenhouse gas emissions are its primary cause. The report identified the increasing frequency of extreme weather events and natural disasters, rising sea-levels, floods, heat waves, droughts, desertification, water shortages, and the spread of tropical and vector-borne diseases as some of the adverse impacts of climate change. These phenomena directly and indirectly threaten the full and effective enjoyment of a range of human rights by people throughout the world, including the rights to life, water and sanitation, food, health, housing, self-determination, culture and development.