Limited functionality available
The election cycle kicks off with federal and state and territory elections aplenty in the coming two years, so the ‘vision’ thing will get a lot of airplay. But more than anything we need the narrative of unification.
We could take heed from former Prime Minister John Howard’s oft repeated phrase that "the things that unite us are greater than the things that divide us".
For well over a decade, climate change has been the great divider in Australian policy discourse. But our latest global survey of executives, including over 100 in Australia, has shown up a remarkable rise in unanimity on action on climate change and an optimism that we can mitigate the worst impacts of climate damages.
Indeed, nearly 75% of Australian executives see the world at a tipping point for responding to climate change – a big step up from 52% just eight months ago. This places us in the top 10 of countries most concerned about climate change. Indeed, we have seen organisations such as the BCA, the NFF, AiG, the ACTU, ACOSS, and the Minerals Council all move significantly on this issue, reflecting the commercial risks and opportunities our economy faces.
Climate change is no longer some theoretical or issue for the future. To underscore the commercial reality of this, almost all the Australian executives surveyed (95%) say their companies have already been impacted by climate change citing the operational and regulatory impacts of climate change, cost of mitigation, societal pressures, and resource scarcity as areas of impact.
And how urgent is this? Well around two thirds (66%) of Australian executives expect climate change to have a high or very high impact on their organisation’s strategy and operations over the coming three years. So, the imperative to act is real, present, and urgent – with just over half of executives surveyed highlighting that regulatory and political uncertainty was affecting their business.
But despite all this, a whopping 89% are optimistic that with the right actions, the worst impacts can be avoided.
This shows that with the begrudging bipartisan commitment to a 2050 target which emerged after COP26 last year, business is again leading the charge with an almost universal focus on action on climate change.
This should give governments and regulators much cause for optimism and drive a compelling case for urgently putting in place the institutional, regulatory, policy and market mechanisms to drive investment in the decarbonisation of our economy.
Proactive action by industry, businesses, and governments to pursue climate resilience could deliver a $380 billion dividend over the next 30 years, in our recent analysis with the Mindaroo Foundation. This means of the estimated $1 trillion in economic costs from climate change over the next 30 years, $380 billion is avoidable through action that can be taken today.
Not only are we confronted by the need to act now to reduce the rate at which greenhouse gasses are emitted into the atmosphere (the mitigation objective), the reality of locked-in climate change means we also need to adapt to some of the climate damages we will now inevitably face because of inaction for so long.
And the need to account for adaptation is far reaching - from how to protect workers exposed to hotter conditions, to assessments we make on climate impacts when building new infrastructure, to planning where our population might live, to reinforcing levees along our rivers and managing living in coastal regions, to creating new markets around natural capital, and to better asset management and investment decisions by business.
Adaptation might mean different work hours and different schooling hours in some regions, and could even impact when and where we play sport outside.
Just as transforming to a net zero economy means widescale change, so too does becoming resilient.
But at the moment, as the Productivity Commission recently noted, just 3% of all natural disaster funding in Australia is spent before the event to prepare. We’re going to have to drastically flip that spending equation. The building back better principle – betterment – has only recently been embedded in Commonwealth-State disaster funding arrangements, and is a good step for a more proactive resilience model in Australia.
But we have to drive this at scale across all businesses, across all sectors, and across all regions in Australia.
Australian businesses, from the finance sector, to agriculture, to mining and manufacturing, need to build adaptation and mitigation into their business strategies and operations. And each time this happens across the economy, we make real the practical steps of helping our economy cope with the locked-in damages from climate inaction of the past.
But it is not just the avoidance of damage that is driving the argument to act. For business, there is enormous opportunity – to get ahead of the curve on trade, to create new products and services that consumers need, to build value propositions for their employees in the war for talent. All the while driving a new public good of sustainability.
Indeed, if we get this right, the economic dividend for Australia is both higher economic growth and more jobs.
So, as we kick off that election cycle, climate change can be the real unifier not divider – just ask Australian business.
To find out more, download the Deloitte 2022 CxO Sustainability Report.
Pradeep is the Lead Partner for Deloitte Access Economics. He has had a long and successful career in public policy, with deep expertise in economics and proven leadership experience. Pradeep has been a senior bureaucrat, working at the highest levels of public policy, across three jurisdictions in Australia. Pradeep’s experience includes: Director of Policy in the Prime Minister’s office, Secretary of the Department of Health and Human Services in Victoria, CEO of LaunchVic – a company established by the Victorian Government to promote start-ups and entrepreneurship – and Associate Director General of the Department of Premier and Cabinet in Queensland. He holds a PhD in Economics and Bachelor of Economics (Hons) from the University of Queensland.