Scott Morrison in danger of becoming a 'climate change casualty', says Steve Bracks
Scott Morrison needs to take action on global heating or he will become a “climate change casualty”, a former
Victorian Labor premier, Steve Bracks, said.
Bracks, who is chair of the $55bn industry superannuation fund Cbus, said the fires that have raged Australia have galvanised community support for action and he called on the Morrison government to put a price on carbon.
“It’s really in a sad position in Australia where we’re seeing effectively corporate Australia, industries, the financial sector and business who are leading on climate change and the government’s not,” he told Guardian Australia.
The fires, which have burned more than 10m hectares, killed 28 people and covered Sydney and Melbourne with hazardous smoke, “made a world of difference” to public feeling about global heating.
“People’s experiences are so impor
tant so I think there is a great appetite now for effective climate action in Australia, and even the prime minister I think is sort of starting to recognise that and move in that direction, and that’s a good thing,” he said.
“If he doesn’t do that I think he’ll be another climate change casualty in Australia.”
Bracks said Cbus had focused on environmental, social and governance issues for about 10 years under its chief executive, David Atkin, who announced his retirement on Wednesday.
Under Atkin’s leadership, Cbus has grown from an organisation with about $12bn under management that was, he said, something of a cottage industry, to one of the nation’s biggest funds.
Atkin, who will step down in six months after almost 13 years in the job, said the fires had changed public sentiment on the climate.
“There’s nothing like seeing the physical consequences – you can see it in Melbourne, there’s smoke everywhere,” he said.
Super funds had “a really important role to play” in combating global heating.
“We’re looking for companies that we invest in who have thought carefully about this, have done their scenario testing, understand what their footprint is from a carbon perspective and are changing their business models to ensure that they can be successful in the future,” he said. “We will not support companies, as investors, if we think that they are being too short term or aren’t taking that issue seriously enough.”
Cbus and other industry funds are always under pressure from activist organisations to dump their shares in fossil fuel companies and other big emitters.
But Atkin said refusing to invest in an industry category was the wrong approach and Cbus looked to invest in companies with a strategy to decarbonise operations.
“We are not investing in companies we don’t have confidence in all the time,” he said.
“We do not have the dinosaurs in our portfolio because we’ve already made that call. We think they’re going to lose us money, not make us money.”
Bracks said: “All the companies we invest in understand they have to have a long-term sustainable future and they have to assess the risk of climate change within that.
“They know that there will be some stranded assets – particularly in energy generation – if we don’t get the right economic settings for investment in generation in the future, and so they’re really taking the lead and doing the work that the government should be doing.”
As well as pushing corporate Australia to take environmental, social and governance issues more seriously, including by serving as a member of a string of investor groups, Atkin also piloted Cbus through two royal commissions.
The trade union royal commission, set up by the then prime minister, Tony Abbott, after the 2013 election criticised Cbus and Atkin over the leak of personal information about fund members to the construction union – before itself giving confidential Cbus documents to other parties.
But Cbus skated through 2018’s banking royal commission after counsel assisting, Michael Hodge, QC, decided not to call any witnesses from the fund.
Instead Hodge and the commissioner, Kenneth Hayne, held hearings that demolished the reputations of the for-profit sector – an outcome that embarrassed the government, which had included superannuation in the inquiry’s terms of reference in a bid to embarrass industry funds over their links to the unions.
“We were to be called and they did not call us in the end and they were quite satisfied with the procedures we had in place, and that’s a good thing,” Bracks said.
“So we take that as a seal of approval, but more than that the royal commission as it turns out was a great boon for industry funds, and certainly in our fund we had something like $1bn of net inflows extra compared to the previous year over the period of the royal commission.”