Climate law hailed as a good sign
‘Opportunity in renewables’
LABOR’S climate change legislation has sent a positive signal to the global investment market on Australia’s commitment to emissions reduction, Fortescue Future Industries chief financial officer Guy Debelle has said.
Speaking at an AICD climate governance forum on Monday, the former deputy governor of the Reserve Bank, who this year moved into the private sector with the FFI appointment, sounded a note of urgency on the need for investment decisions and funding to get Australia to meet its climate goals.
“(Climate legislation) certainly sends a positive signal that wasn’t there before, and which was highlighted to us by foreigners in terms of their consideration of their investment decision. It certainly sets a baseline,” Dr Debelle said.
“(But) a fair chunk of corporate Australia has been out in front on it. At Fortescue we’re at net-zero by 2030, not 43 per cent lower by 2030, so there’s a fair chunk of corporate Australia that is already out in front of this, which makes it makes the objective easier to achieve.”
The challenge now was the urgent need for investment decisions and funding, he added. “Those investment decisions need to be taken now. We’re having to look at a fairly large-scale investment program to achieve those netzero objectives by 2030. So you need to be doing it now and you need to be funding it now. You need investors to understand the environment you’re operating in.”
Australia has a “great opportunity” to be a renewable energy exporter to the world, he said, as he warned on the macroeconomic and financial stability concerns around climate change and net-zero ambitions.
“You don’t want to be lending to companies that are going to be stuck with stranded assets, probably not a good credit decision. So you want to have a framework to be able to assess that,” he said. “You also generally want to be lending to companies with good opportunities, and if the opportunities are in the climate transition space, it’s probably a good idea to have an understanding of that as well.”
Speaking at the same forum, NAB chairman Phil Chronican called out the “massive” commercial opportunities in financing the climate transition, as he noted recent supply interruptions to power in Australia had emphasised the importance of energy security and the need for an orderly transition to renewable energy.
Banks needed to play their role on the path to net-zero, Mr Chronican said.
“As a priority, we’re working with 100 of our largest emitting customers to develop or improve their transition plans by 2023, and we’re supporting customers in this decarbonisation journey and to help them build resilience to climate change,” he said.
Calling the future of gas in the energy market a “gnarly” issue, he conceded the big-four bank’s carve-out for energy security in its net-zero plan could see it lend to greenfields gas projects in the future.