Dr Mary Stewart

ELECTION 2022: The federal election has at last brought more regulatory certainty on emissions cuts. This will quickly unlock big capital investments in the sector, but also some fierce competition for available technology and human skills to capitalise on the new landscape.

That’s the verdict on the election from one of Australia’s top leading energy and climate risk experts, Dr Mary Stewart, who heads up leading sustainability consultancy Energetics, as chief executive officer.

While it wasn’t fought on climate policy, it was definitely lost on a lack of climate policy. And I think that there’s been a very clear indication from the electorate that they want urgent action on climate,” Dr Stewart told the Fifth Estate.

A decade of inaction and uncertainty

Over the past decade, a growing number of businesses and industries have prepared to make the transition to net zero.

At the state level, there’s been growing appetite for premiers to partner with business by adopting either a net zero target or, in the case of Victoria, mandating a midterm target.

Unfortunately, at the federal level, the outgoing government was increasingly lagged businesses. This was a major issue because, in the words of Dr Stewart, “one of the transition risks is policy uncertainty” – especially when it comes to making big capital investments.

“At the federal level, businesses have definitely led the government. I mean, no one was more surprised than me when the Business Council Australia stood up and said we need a midterm target and challenged the federal government to do something about it.”

There will be a first mover advantage in getting access to resources. And the resources aren’t just the physical technology. The resources are also the people because the entire [sustainability sector is] unbelievably busy, we don’t have enough people.

Dr Mary Stewart

The net result was that many businesses and sectors were left to attempt making the transition on their own, including through “quick wins” such as through power purchasing agreements.

However, the lack of strong leadership or support from the federal government has led to some companies holding back on bigger capital investments.

“Up until now, everyone has been working on this problem in good faith. And companies have been making significant changes, mostly through voluntary mechanisms like a commitment to the science based targets, which requires a 50 per cent reduction in scope one and scope two emissions by 2030,” Dr Stewart said.

Opening the floodgates to capital investment

The good news for business out of the election is that the period of uncertainty is coming to an end, with the election marking a line in the sand.

By setting a midterm emissions reduction target of 43 per cent and a central direction on carbon, Labor has taken off the concrete boots and set a clear direction for companies to move forward with big investments.

“The more substantive plans and the big capital decisions can now take place,” Dr Stewart said. “As long as there is policy certainty to 2030 companies will start making the big changes to reduce, particularly, their scope one emissions through capital programs.”

Given the changing landscape, Dr Stewart’s clear advice to business owners and managers is to act now – because you don’t want to be in the middle of the queue for the resources you need to drive your business transition.

You know that you have to reduce emissions, you know that the temperature is changing, you know that your company has to survive in this vastly changed environment

Dr Mary Stewart

“You need to start getting your orders in because so many people are going to have to change so fast that we are likely to see a shortage in supply and some of the key technologies. We’re already seeing some supply chain interruption on chips for management of renewable energy.

“There will be a first mover advantage in getting access to resources. And the resources aren’t just the physical technology. The resources are also the people because the entire [sustainability sector is] unbelievably busy, we don’t have enough people.”

Now’s the time for action

The changing landscape means that now is the time to make big business building decisions.

There is a huge opportunity that has opened up in the market that has opened up for companies that offer energy efficiency outcomes – including in the built environment sector.

“You know that you have to reduce emissions, you know that the temperature is changing, you know that your company has to survive in this vastly changed environment,” Dr Stewart said.

“Absolutely take your business model apart and work out what of it is going to survive post 2030 and focus on that and deliver on that. Because now is your opportunity to make those changes that will help you build a financially sustainable company post 2035.”

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