Today’s news that the Commonwealth Bank is being sued by its shareholders for failing to disclose climate risks marks the latest high-water mark in the fight to put climate change firmly on the to-do list of board executives. It follows hot on the heels of recommendations on climate risk from the Taskforce on Climate-Related Financial Disclosures, suggesting that companies should do more to report and reduce their climate risks, and a legal opinion issued by Noel Hutley SC from late last year suggesting that managing climate risks is now a part of executives’ duty of care.
At Edge Environment, we’re lucky to work with a range of organisations that take climate change risk very seriously. We’ve undertaken analyses for a number of large property owners to help them understand the risks posed to their portfolios. Doing so means they are well-placed to develop and prioritise adaptation plans, and can include climate risk as a part of their wider due diligence process in relation to new assets.
Similarly, undertaking climate change risk assessments is now a standard step for major infrastructure projects. Most large transport infrastructure projects in NSW, for example, are required to have an Infrastructure Sustainability rating, a key part of which is analysing climate risks and identifying adaptation measures. The long life of the assets and the sums of money involved in building and maintaining them makes that approach a no-brainer. Certainly, among our clients, it is considered business as usual.
It is exciting to see many local authorities, too, on the front foot. For example, we’re working with the Insurance Council of Australia and a host of local councils to look at the role of Development Control Plans in reducing future climate risks. Wagga Wagga Council is also investing in understanding the environmental threats to their assets and the wider community so that they can reduce future disruption and costs in the event that the area experiences repeats of the floods and heatwaves of recent years.
We see these initiatives as encouraging signs of progress.
For those organisations failing to take the even most basic steps to understand the climate risks they face – let alone what they could do to address them – we hope that the threat of ending up in court doesn’t need to be the incentive to spring into action.