According to the World Bank, Australia is the 13th largest economy. On climate, however, it is increasingly falling out of step with many of its key trading partners. Of the 12 economies ranked higher than Australia, 8 have net zero targets by 2050 and 2 (China and Brazil) have net zero targets by 2060. In falling behind on climate ambition and continuing to invest heavily into fossil fuels for export, Australia risks its own economy as countries, such as China, begin to reduce their fossil fuel usage.
Australia has long been recognized as a climate policy laggard and continues to fall behind. The 2021 Sustainable Development Report, authored by Professor Jeffrey Sachs, a world-leading economist, and the UN Sustainable Development Solutions Network (SDSN), ranked Australia as last out of 193 UN member countries on climate action, a demotion from the country’s ranking of 2nd last in 2020. Additionally, Climate Action Tracker has ranked the country's climate policies as 'insufficient' and in line with global warming of between 2 and 3 degrees Celsius.
In September 2020, InfluenceMap released its first report looking specifically at corporate lobbying on climate policy in Australia. It analyzed the climate positions of 20 of the country’s most influential industry associations and how they had engaged on relevant policy. In 2021, this work has been updated and expanded to include the 50 largest companies operating in Australia, based on greenhouse gas emissions and economic value.
The results of this new analysis are divided into three key themes.
This covers the 50 largest corporate entities in Australia, judged by a weighted assessment of Australian tax revenue and overall GHG emissions. InfluenceMap’s analysis ranks companies based on their overall support or opposition to Paris-aligned climate policy, both in their direct policy engagement and indirect policy engagements via their trade associations.
Strong oppositional lobbying from fossil-fuel value chain sectors are strongly outweighing supportive voices. This is having significant, negative consequences for Australian climate policy. Of the 14 policies analyzed by InfluenceMap, 6 had been weakened following overwhelmingly negative lobbying from the corporate sector.
The research highlights the increasing number of statements made by companies and industry associations communicating support for net zero emissions by 2050, while lobbying against science-based pathways to achieve this goal.
The graph below maps the Total Score and global Engagement Intensities for the 50 companies included in this research. The Total Score expresses how supportive or obstructive the company is towards climate policy aligned with the Paris Agreement, incorporating an analysis of its trade association links. The Engagement Intensity (0-100) expresses the intensity of this activity, whether positive or negative.
Only one company (Apple) was found to be supportive of climate policy. This company, however, has very low engagement with Australian climate policy.
The remaining companies are divided evenly between those that oppose climate policy and those that have an overall mixed position. Of the companies with mixed positions on climate action, the highest scoring are companies in the financial sector. The opposing group is dominated by mining and energy companies.
The fight between these two broad groups over Australian climate policy, however, is not a balanced one. The results show that the group of companies with positive or mixed positions on climate change generally have lower engagement with specific Australian climate policies, instead predominantly communicating positive top line messages around the need for climate action. This is particularly true of the financial sector. In stark contrast, the companies with negative positions on climate action have much higher levels of engagement overall.
- Offering top line support for net zero by 2050 has increasingly become a tactic used by the gas lobby to portray themselves, and the role of gas, as aligned with the goals of the Paris Agreement and recommendations by the IPCC. This group includes large Australian energy producers AGL Energy, Origin Energy, Santos, and Woodside. - This position, however, is crucially misaligned from the guidance given by the Intergovernmental Panel on Climate Change in its 2018 Special Report on 1.5C. This report stated there needs to be a rapid and significant transition from fossil fuels to renewable energy - particularly in electricity generation – in order to limit temperature rise to 1.5 degrees. And while there are pathways which allow for an increase in the use of gas, these are heavily reliant on carbon capture and storage (CCS) – a technology that is costly to develop and not yet proven to be effective at scale. As such, relying on such technologies is a riskier and more costly pathway compared with developing renewable energy. - This position is now also misaligned from the guidance given by the International Energy Agency (IEA) in its recent analysis on reaching net zero by 2050. Faith Birol, the IEA's executive director stated: "If governments are serious about the climate crisis, there can be no new investments in oil, gas and coal, from now - from this year."
The Australian government has committed to a "gas-fired recovery" from the COVID-19 pandemic. In response to the International Energy Agency's Roadmap to Net Zero by 2050, which stressed the need to limit fossil fuels in the energy mix, Australia's resources minister Keith Pitt maintained that "coal, oil and gas will continue to be a big part of Australia's energy mix". Instead, the government has taken on board the recommendations of two commissions led by individuals with strong ties to the fossil fuel and mining sector (the National Covid-19 Coordination Commission, led by Nev Power; the Grant King Review, led by Grant King). This has resulted in several big wins for the gas lobby, including:
In September 2020, InfluenceMap analyzed the 20 industry associations most engaged with key climate and energy policy streams in Australia. Our research found that 75% of the groups assessed were broadly unsupportive of a Paris-aligned policy response, taking negative positions on climate regulations while promoting a pro-fossil fuel agenda, led by the Minerals Council of Australia, Australian Chamber of Commerce & Industry, and NSW Minerals Council.
A central ask of companies from the investor community, including Climate Action 100+ (CA100+), is to audit and publish reviews of their industry associations' climate change lobbying and alignment. As of May 2021, 13 of the 50 companies in-scope have published a review, starting with BHP in 2017. InfluenceMap is tracking and assessing these industry association reviews on an ongoing basis to feed into active investor engagements, which can be found on our CA100+ webpage.
Across the 13 companies, 9 Australian industry associations have been identified as being at least partially misaligned with the companies’ climate policy positions. In the vast majority of these instances, the companies chose to remain "inside the tent" and progress the industry associations' climate change policy positions internally.
Despite nominal improvements in top-line messaging from some industry associations, including the Australian Petroleum Production and Exploration Association and the Minerals Coucil of Australia, there has been limited “real-world” improvements in their climate lobbying since 2017. The lack of transparency on corporate engagements with industry associations exacerbates the perceived lack of action to address misalignments.
In 2020 and 2021, a handful of companies have decided to suspend or terminate their membership to obstructive industry associations. This includes AGL Energy, BHP, and Origin Energy leaving Queensland Resources Council in 2020, and Equinor leaving Australian Petroleum Production & Exploration Association in 2021. With more reviews expected in 2021, there will be increased investor scrutiny on corporate links to obstructive industry associations.
Nine industry associations were identified by companies as partially misaligned with their own positions. However, InfluenceMap's analysis suggests that many cases of misalignment with the Paris Agreement were missed due to underlying problems with the review process, including “cherry-picking” high-level positive statements to support a finding of alignment. Our analysis indicates that 12 Australian industry associations have climate lobbying practices misaligned with the Paris Agreement (ranked as a D or below under InfluenceMap's system), with 3 groups materially misaligned (ranked as F or below).