News from the front desk 454: What’s an activist?
An activist might be a young schoolkid, sure. And because of this the climate “strike” attracted the ire of political leaders, strangely irked by the power of these children to make the world pay attention. One child in particular, Greta Thunberg, at just 16 years of age, has came in for more vitriol than anyone twice her age could reasonably be expected to bear.
It’s easy to chide the kids: They don’t command social or financial capital. They don’t vote – yet – and they don’t own news outlets, so they generally have no voice to respond other than occasionally through leaders such as Greta.
But let’s be realistic. Increasingly activists don’t carry banners; they wear suits. Or heels. Or both. They work in a big corporate, or a bank. Increasingly they are the entire bank. Think of the Commonwealth Bank getting out of coal. Think of ANZ committing to 100 per cent renewable energy within five years as it joins RE100 to be powered by 100 per cent renewable energy.
Does ANZ’s group general manager property Kate Langan look like an activist to you? Meet the new face of climate activists.
Activists abound in the property sector, leading the Australian economy in sustainability and the world through indexes such as the Global Real Estate Sustainability Benchmark.
Every week the news just gets better. Commonwealth Bank is joined by Monash University, Multiplex, the City of Melbourne, AMP Capital Wholesale Office Fund, CBUS Property, Cundall, the City of Sydney, Dexus, Frasers Property Australia, GPT Wholesale Office Fund, Local Government Super, Nightingale Housing, and Stockland in striving for net zero emissions within 10 years.
Dexus just raised the bar again by achieving an average 5 Star Green Star Performance rating across its group office portfolio, with a Green Star Performance portfolio rating of 4 Star across 76 office and retail properties.
That’s a huge achievement and David Yates, the company’s executive general manager, sustainability, was rightly proud to say: “We are moving forward with our own initiatives to improve energy efficiency and adopt renewable energy both onsite and offsite.”
Think of a bunch of other “activists” who have all withdrawn from supplying stuff to Adani.
And, as we’ve reported here, often, these companies join the growing number of retail businesses who want to be on the right side of history, going green. Who cares if their motivation is to be on the right side of the ledger?
In fact, the two are very closely connected. A more sustainable cleaner world makes sense not just because it’s better, but because it’s more profitable – and because it pays to fit in with consumer trends. The customer is always right after all: for instance no one buys asbestos any more, nor do they buy radioactive toys that light up in the night. The shock jocks would be happy to see all these businesses go broke in order to support one small cohort that has this federal government in its pocket.
Now you can’t say The AFR is an activist paper, right?
Yet day after day it comes with stories of big financial institutions flagging their own escalation in climate response. Alongside stories of devastating climate damage.
On Thursday there was a powerful front page “exclusive” on the campaign by Market Forces to influence CommBank to get out of fossil fuel investing.
The piece noted “mounting pressure from large investors and financial regulators such as the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission on financial companies to manage their exposures to climate change more rigorously.”
And another prominent story: “Climate change will knock tens of thousands of dollars off Australians’ superannuation balances and make those over 65 more likely to die of heat stress” said the paper, quoting a report from the Actuaries Institute, which is probably one of the most evidenced-based organisations you’re likely to find given that insurance agents rely on precision risk analysis to make their money.
The authors at the Actuaries identified two “megatrends” as key: global warming and the ageing population. (Macquarie Group recently identified climate change and clean energy as their two mega trends driving investment)
Then this: The Australian Prudential Regulation Authority’s survey of 38 companies found “Climate risk is “all-pervading” warns APRA, ASIC and that “all of the banks, super funds and general insurers surveyed were taking active steps to understand climate risk”.
In property the notion of paying serious attention to climate and sustainability goes without question pretty much anywhere at the top of the property sector.
Phil Cowling, chief sustainability officer for Cromwell, says that in the last 18 months attention has been seriously ramped up.
It coincides with the change in his role, which is now part of the “C-suite”.
In other words, sustainability is now inside the board room as an issue and people such as Cowling need to be perfectly comfortable to speak its language.
Board members want their questions answered and those questions are increasingly around investor concerns on sustainability and climate risk.
“What are we doing about climate risk? That’s a question coming up more and more and being queried more and more.”
The questions get specific. Today, Cowling property companies want to know if the property companies participate in Global Real Estate Sustainability Benchmark (GRESB), and if so, what their score it. The investors also want to know what they are doing to address the issues coming out of it.
GRESB is “permanently expanding,” says Cowling, into health, well being and now resilience, and this again reflects the trend in concerns.
The benchmark, alongside the Carbon Disclosure Project, are both going to be “quite important and elevated in the next few years”.
Personally, Cowling sees this as an opportunity. It’s not about sustainability reducing anything; “the Task Force on Climate-related Financial Disclosure is about placing the issue on the financial balance sheet.
“Once that happens you’ve got the whole company really concentrating on it.”
It’s a poisoned chalice though, he says.
“It’s more work we have to do but it will be very valuable in putting forward the argument that looks further out in terms of what the impacts are likely to be.
“I think it’s going to be quite transformational”.