Last week the RBA’s Deputy Governor Guy Debelle recently issued a stark warning about ‘Climate Change and the Economy’. His landmark speech addressed the potential impact of climate change on the Australian Economy and the need for an orderly transition to a lower-carbon economy.
In recent years, AGL has sought to play a leading role in the way business engages on the important issue of climate change. We’ve given serious consideration to the physical and transitional risks and opportunities associated with climate change and the transition towards a low-carbon economy.
In 2017 we released a special report on a ‘Carbon Constrained Future’ and in 2018 we covered off our approach to climate-related financial risk in our special report ‘Powering a Climate Resilient Economy’.
Recent presentation on climate risk disclosures
Last week I was fortunate enough to give a presentation at a climate risk seminar in Melbourne hosted by Norton Rose Fulbright. I was privileged to be joined at the seminar by Elissa de Wit, Partner and Head of Climate Change at Norton Rose Fulbright, Emma Heard CEO of the Investor Group on Climate Change and Christophe Brulliard, Principal Consultant at Point Advisory. We each brought a different perspective to climate risk disclosures.
In my presentation I covered my experiences on how to identify and manage climate-related risks and opportunities in line with the Task Force on Climate-Related Disclosures (TCFD) recommendations for AGL. I shared AGL’s journey as we transition to a carbon constrained future, taking participants through the challenges faced and opportunities which have arisen out of it. You can have a look at my presentation here.
Task Force on Climate-Related Disclosures
AGL believes that the TCFD framework allows us to be transparent about climate change and the risks and opportunities it poses to our business.
Our TCFD disclosure was published in August 2018 and covers the following key points:
- AGL’s strategy on climate change. Outlining AGL’s views on Australia’s energy market transformation and the ways in which AGL is positioned to ensure the company’s long-term sustainability. This section also elaborates AGL’s approach to scenario analysis.
- AGL’s approach to corporate governance over climate-related financial risk, including Board, Committee, and management oversight.
- Material risks and opportunities to AGL’s business. While AGL anticipates some financial implications from the physical risks associated with climate change, it is the transitional risks associated with Australia’s energy market transformation and transition to a low-carbon economy that present the most material risks to AGL’s business.
- AGL’s key metrics and targets on climate change including its greenhouse gas footprints, thermal generational closure program, and emissions intensity target.
We believe these disclosures will assist AGL’s investors, lenders, insurers, and other stakeholders to better understand how AGL is managing this issue.
To read more about AGL’s approach to climate-related financial risk, please read our report ‘Powering a Climate Resilient Economy’.