Carbon pricing vital for financial stability: Westpac

Banking giant Westpac says the federal government must play a role in developing a price on carbon if the financial risks of climate change are to be understood and mitigated.

Michael Chen, the bank's head of sustainability and prominent player in the Australian Sustainable Finance Initiative (ASFI), said without mitigation the effects of climate change would threaten the financial system's stability.

"Central banks and regulators around the world are saying climate risk is financial risk, but the financial system hasn’t adequately priced in environmental and social risk, and this is a risk for the financial system’s stability," Mr Chen told The Australian Financial Review.

Read the story from the Financial Review by James Fernyhough - “Carbon pricing vital for financial stability: Westpac.”

Australian mining giants 'may be breaking law' by ignoring climate change risks

More than a dozen of Australia’s largest mining and infrastructure companies may be in breach of their legal duties by refusing to consider the financial risks posed by climate change, an investor action group says.

 The Australian Securities and Investments Commission audited
 60 mining and infrastructure companies and found only
 10 identified climate as a material risk.

In September, the Australian Securities and Investments Commission published a report that said “the law requires” relevant companies to “include a discussion of climate risk” in their annual report.

Market Forces, a group that advocates for environmentally sustainable investment, assisted shareholders at company annual general meetings. Almost all of those companies ignored or dismissed climate change as a financial risk to their business.

“Directors are legally required to consider climate risk. Failure to do so may constitute a breach of their legal duties,” Market Forces campaigner Rachel Deans said.

Read the story from The Guardian by Ben Smee - “Australian mining giants 'may be breaking law' by ignoring climate change risks.”

The G20’s new guidelines will help investors tackle climate change

New guidelines being presented to the G20 this weekend will change the way individuals, companies, investors and regulators manage the financial risks of climate change. These risks include physical events, such as changing weather patterns and natural disasters, as well as new technologies and regulations.

Rosemary Sainty - G20 guidelines will help
investors manage climate change risks.

As big investors adopt the guidelines, the companies in their portfolios will be pressured to report on climate change. This will make it easier for investors of all kinds to understand the impacts of climate change on their portfolios, and to assess new opportunities, such as new products and services that will be required and developed.

Companies like BHP have already begun reporting on how climate change will affect their businesses. But, until now, corporate disclosure on climate change has been patchy, shallow and not always financially relevant.

Read the piece on The Conversation by the Scholarly Teaching Fellow at the UTS Business School from Sydney’s University of Technology, Rosemary Sainty -  “The G20’s new guidelines will help investors tackle climate change.”

Investors pushing business to avoid a carbon bust

Ask a senior banker about the big financial risks that keep them up at night, and climate change probably won't be one of them.

Avoiding a 'carbon bubble' is front of
mind for a growing number of investors. 

Yet that may soon change, as investors controlling trillions of dollars, and powerful regulators, turn their sights on the potentially big financial risks created by a world that's getting warmer.

Even as US President Donald Trump seeks to reverse global moves to lower carbon emissions, a group of corporate giants and regulators have decided the purely financial risks of climate change are too great to be left unchecked.

In July this year, a group of global firms with combined market value of US$1.5 trillion and US$20 trillion in assets will deliver recommendations to G20 leaders on how to avoid the risk of serious financial dislocation caused by a carbon bust.

Read the story by Clancy Yeates in The Sydney Morning Herald - “Investors pushing business to avoid a carbon bust.”