australia’s extended and disastrous bushfire season has brought into sharp relief the high economic and personal cost of climate change.
That economic impact is increasingly recognised around the world as a major business risk. In California, for instance, it led to what is now referred to as the first climate change bankruptcy: the failure of Gas and Electric. The company was brought low by litigation after its equipment was blamed for the Californian wildfires.
It is not the only example. As Four Twenty Seven’s Emilie Mazzacurati and Natalie Ambrosio write in a paper for Which-50 this week, the insurance sector was likewise exposed. “Merced Property and Casualty local insurance company went bankrupt after California’s Paradise fire. The company had $US23 million ($A34 million) in assets and owed $US64 million ($A94 million) in liabilities after the fire, which the state of California took over after the company defaulted.”
While the political debate in australia remains fraught — with positions split between those who accept scientific evidence and those who prefer special magical thinking and foil hats — business is already recalibrating around the opportunity presented by one of the most disruptive and transformative trends in the world today.
Sustainability is emerging worldwide as one of the great drivers of corporate change, and with it innovation and wealth creation. But Sustainability is about much more than climate or new sources of electricity. Many companies, for instance, have subscribed to the United Nations Sustainable Development Goals which include 17 measures encompassing issues such as climate change, diversity and approaches to dealing with poverty.
And sustainability is already a big driver at some of Australia’s biggest businesses.
According to NAB’s General Manager Social Impact, Dr Sasha Courville, “We have transformed the way we consider engagement with environmental, social and governance (ESG) issues across the bank. This is a move away from the concept of corporate responsibility as the basis for a sustainability strategy. At NAB, we aim for a more active approach, through a focus on the social impact that allows assessment of tangibles and concrete action.”
Courville told Which-50, “At the heart of our strategy lies a collective understanding of the action needed now to promote a sustainable economy in the future. We are serious about setting real-world goals and targets and taking action.”
NAB’s commitment is reflected in the data. The bank, one of Australia’s Big Four, was recently ranked 42nd in the Global 100 Most Sustainable Companies list. That also made it the top-rated business in Australia. “This reinforces NAB’s strong focus on making a positive and lasting impact on customers, communities and the environment,” said Courville.
While banks and other financial institutions are often on the receiving end of criticism for the funding decisions they make, within the bank there is a growing awareness of the power of sustainable finance.
“There is global momentum around sustainable finance at the moment. We are seeing this through new initiatives and guidance from global central regulatory bodies.
“Our project finance portfolio plays a big role in supporting Australia and New Zealand’s growth. Our in-house expertise and passion for this space has enabled us to become Australia’s leading arranger of project finance for Australian renewable energy, helping our customers and community make the low-carbon transition,” Courville said.
The fact that businesses like NAB are adopting the broadest definition of sustainability is what gives it its transformative and disruptive potential as it impacts almost all aspects of the modern enterprise.
Fiona Walmsley, Head of Sustainability Governance at retail giant Woolworths, told Which-50, “At Woolworths, we think about sustainability in its most holistic sense.
