News from the front desk, Issue 512: Take a well-known economic commentator who regularly appears on television, newspapers and radio, from the big end of town, with a background that includes Deloitte, Access Economics, KPMG and Urbis. Add a new job with a highly respected climate organisation and watch the impact soar a notch or two. Especially if that commentator is an economist with a strong background in climate science as well.
That’s the game plan with the appointment of Nicki Hutley to the Climate Council as councillor and economic commentator. Bringing someone like Hutley to the table is a sign that climate and sustainability are stepping up to the main stage.
The Climate Council’s move is not the only one. As the new year and the new decade edges into shape there are signs of a new singularity of purpose emerging – bolder, more ambitious, more risk taking than before. Climate and sustainability are taking their place as central economic and global issues, alongside their ecological and humanitarian imperatives.
You can see it in the strong economic and jobs framing from new US president Joe Biden with a sweeping set of a climate policies that include reserving 30 per cent of federal land and water for conservation purposes, making climate policy central to national security and promises to build a network of electric-car charging stations nationwide that could create 1 million new jobs.
The heavy emphasis, according to the New York Times is on the word jobs, which appears 15 times in the executive order.
You can see it in the posturing of Australia’s Opposition Leader Anthony Albanese as he tries to reframe the shadow cabinet reshuffle, removing Mark Butler from the climate portfolio and replacing him with Chris Bowen as a sign that the central focus of Labor Party climate policy should be job creation and economics, even though a barrage of criticism would say more telling is the support for this move from coal advocate Joel Fitzgibbon.
You can see it in the jobs market in our industry, in the careful positioning under way – typical for this time of year – but that now signals the game has shifted up a notch.
Hutley’s new gig, for instance. Starting with a ready-made media profile, it’s clever.
At the Republic of Everyone which advises major corporates on key issues around sustainability and brand, and is therefore a good bellwether for directions at the big end of town, founder Ben Peacock has snapped up another well regarded name in sustainability strategy to ramp up his capability.
Lauren Haas Jones comes with a background of nearly eight years at Multiplex. In the intervening time since, she’s also racked up an unusual array of extra curricular activities that she calls personal sustainability, including impact investment consulting and believe it or not, a massive trek half way across the Aussie outback with her professional adventurer husband Justin and one year old child.
For Peacock, it’s a perfect fit: a serious background in corporate strategy with one of the giants of the property industry, plus the imagination and, you have to say, imaginative gumption, to walk 1200 kilometres in 102 days. Collateral fringe benefits include a documentary about the trek and public speaking engagements to share and inspire.
All should blend well with Peacock’s plan to more creatively engage a batch of clients that include Acciona, Autodesk, SCA Property and South Pole, plus youth and young adult apparel outfits with 16–23-year-old customer bases asking increasingly penetrating questions. On diversity, organic materials, supply chains and modern slavery.
The big driver for most clients, he says, is consumer sentiment, which has shifted “so fast and so far”.
“Those who are doing any level of consumer listening are hearing a roaring uplift in consumer demand.”
The appointment of Haas Jones is “very important”, Peacock says. “In my opinion Lauren is one of the most accomplished sustainability strategists in the country and she also has a very strong knowledge of carbon.”
At the global/political/consulting level another consultant with impeccable credentials is positioning for a major strategic play.
EY’s Dr Matthew Bell, climate change and sustainability services leader for the Asia Pacific, will in two weeks set up shop in the company’s London office (yes, exactly as Covid there hits the high water mark, he quips). His job is to tap into the new headwinds reshaping global trade and policy – even politics, you could argue.
The lures are ample. There’s the UK, which under Boris Johnston aims to leave a trail of dust on the EU’s own aggressive climate plans (see what David Thorpe tells us this week).
“Europe is absolutely driving the greening of the economy,” Bell told The Fifth Estate on Thursday. “The Covid recovery is tied to green outcomes. And Biden’s election is pretty interesting to us because one of the major contributors to global action on climate will be the US.”
Biden is expected to attend the G7 this year, to be held in the small Cornwall village of Carbis Bay (generally sporting a population of about 3000 people, and close to Bell’s home turf.)
“My assumption is he will go to the G7 and this will translate to action.”
For Bell, it’s Biden’s commitment to decarbonise the electricity grid by 2035 that is most interesting and whose impact, he suspects, may have evaded many people.
This is a highly significant announcement, its huge, Bell says.
“If we think about what he’s doing: his landmark policy is decarbonising the grid by 2035.
“Imagine that transformation in Australia. Every real estate asset would be effectively carbon neutral. It opens up trade – significant trade opportunities.
“You could have green hydrogen, green steel, green aluminium produce and all of a sudden you’re exporting net zero or carbon neutral products.
“Imagine if you were a nation capable of producing low emission or no emissions commodities, it would redress the [low] labor cost advantage of other countries.”
In a world that is working to erect carbon border tariffs.
Bell’s strategy for London and Ireland, is to pretty much replicate the 270 strong crack market dominating team he’s built up in corporate sustainability consulting in Australia.
The EY team currently numbers about 40, so there’s a long way to go to match the Aussie team. Watch out London for a spate of poaching.
The sleeping giant awakes
Back in Oz, Nicki Hutley is not exactly pessimistic herself. Business is waking up.
She agrees with Bell that the push for more action in this space has become so much easier with the Joe Biden in place.
“It makes a huge difference. Obama was instrumental in getting Paris over the line,” she told us this week.
“It will bring pressure to bear on recalcitrants like Australia.”
The shifting money flows are also hugely encouraging.
For instance, Larry Fink from BlackRock, which has more than A$11 trillion in funds under management, issued another “stern warning” (now yearly) to the world’s biggest companies to lift their climate game or be dumped by his investment plays. It can’t be too comfortable for governments such as ours to see, every day, growing numbers of big players joining Fink’s side.
The real issue is time. How much of it do we really have? And what will be the costs to our economy of not taking rapid action? There’s already a great deal of change locked into our earth’s system.
A new report from Hutley’s new employer the Climate Council this week outlines the costs already baked in – $35 billion just in the past decade, and potentially $100 billion a year by 2038.
It’s a hard-hitting report, Hutley told The Fifth Estate.
But then again, so is the extreme heat now pushing up temperatures in places such as Penrith in Western Sydney.
“Sydney may be too hot to live in within decades,” said one headline.
The City of Sydney’s climate resilience head Beck Dawson said in the same article that “We are not yet building a city that’s really equipping our people to survive and adapt extreme heat.”
Some experts say that now needs to include building houses and perhaps entire suburbs underground.
(Note: this article appeared on an ABC site, so we can’t guarantee it’s still in its original form, given the increasing tendency of the PM’s office to demand publisher’s editing rights).
Time is the biggest challenge now
What concerns Hutley the most is the timelines involved and outlined in the Climate Council report.
“It’s especially talking about how we are running out of time. If we are to get to net zero by 2040 then we need to be half way there by 2030.” This while the Australian government has signalled an end to the politics of climate but refused to name a target.
There’s a sense of urgency, almost despair from those who are peering closely into the trajectory before us, she says.
“Whatever I can do to help government to understand the relative costs and benefits is good even though they may not be convinced about the climate science. Even if they dispute the cause there’s no doubt it’s and having alarming escalating costs to the economy such as losing the Barrier Reef.
“That’s a $70 billion asset. It brings in tourist dollars.”
She thinks a stimulus for change will come from the carbon border tariffs proposed by the EU.
“Australia needs to think about how we trade and who bears the cost of emissions. They need be split around the producer and the consumer.”
It’s not good enough to say China burns our coal so it’s not our problem.
“Ultimately this is a problem for every world’s citizen but Australia is so much more vulnerable. We’ve got the Pacific nations that are 300 times more vulnerable and these will be climate refugees we will be dealing with.
“Financially, economically, we’ve been supporting them for a long time. It’s in our interests, even our self interest.”
The bushfires and Covid have underscored that change, disruption, can be fundamental, she says.
Hutley worked for years on climate issues well before her time with Deloitte, and as chief economist at Urbis she gained valuable understanding of urban issues as well.
As we know that’s a big asset to have because it’s the urban environment that bear the brunt of climate change, economic costs and also offers the biggest opportunities for mitigation and adaptation.
It’s now time, unfortunately, to make sure we also focus on the latter.
The Greenwash Police
This year will also be the year of the greenwash police.
Watch out.
While Larry Fink of BlackRock espoused a green investment agenda groups such as Reclaim Finance, which claim they have been “instrumental in pushing some of the world’s largest private and public financial institutions, including BNP Paribas, AXA, the Norwegian Pension Fund and the European Investment Bank to cut their financial services to coal and fossil fuels” together with Urgewald say they’ve got evidence that BlackRock still has US$85 billion in coal.
ESG is not enough they say. “Rather, BlackRock’s $24bn investments in coal expansion are a perfect illustration of how investors can hide behind ESG credentials and net-zero commitments.”
Investments in Adani, Sumitomo or KEPCO would suggest the activists are right.
They point to the acuity of language: “Achieving net zero by 2050 could mean a lot of things, including offsetting rather than actually reducing emissions.”
It’s also instructive to check out what The AFR’s acerbic Joe Aston says about BlackRock, after he pretty much flayed Rio Tinto boss Jean-Sébastien Jacques day after day when the miner destroyed the ancient Juukan Gorge. We tend to keep an eye on this writer.
Larry Fink’s visit to Australia last year, Aston said, was to “have his ring kissed by ASX20 chairmen and warn them that ‘every government, company and shareholder must confront climate change’. Then he got back on his $98 million Gulfstream 650 and burned another 21,000 kilos of jet fuel all the way home to New York.”
It’s one of the reasons we pick 2021 as the year of the greenwash police. Hardly surprising after the call out from the future most of the world got in 2020.