Theme: Where to from here? The new rules for business
Keynote speaker: Mark Joiner, Executive Director Finance, National Australia Bank
Introduction
This year’s National Conference featured both stirring and startling presentations from a high-profile panel of speakers. Following the presentations was a panel discussion, with some robust discussion of current issues facing the business world and the ways in which businesses are tackling the step-change opportunities presented by the carbon reduction challenge.
Summaries from each of the speakers are available on this page. Click on the link below to go to your chosen speaker's summary.
Mark Joiner, Executive Director Finance, National Australia Bank
Keynote speaker, Mark Joiner pointed to biodiversity as the next environmental challenge on NAB’s agenda. NAB has been carbon neutral since September last year, having embarked first on a program that resulted in a 25% reduction in emissions over just three years – exceeding their own target of 20%. In the process, they have found it ‘amazing the energy you can unleash in an organisation’ by harnessing the enthusiasm and initiative of the staff. But, while championing the benefits that this program has delivered, Joiner says that biodiversity, rather than climate change, is the centre of the environmental challenge. "Biodiversity gives us an environment that is robust and adaptable and able to cope with change. The canary in the coalmine is species extinction", says Joiner.
All the major banks have endured criticism from environment groups for their investments in coal. Joiner argues that it’s "not the bank’s moral right to withhold credit from a robust business model because they’re not ideologically aligned with them". Rather, he sees the role of banks in closing the gap between regulation and values as influence through demonstrating leadership. Their voluntary effort to become carbon neutral embodies this approach. The bank has invested in reducing its carbon footprint and purchased carbon offsets to become carbon neutral. This effort has been more than repaid, not only in staff engagement, but also in their capabilities with regard to the burgeoning carbon market, and in their relationship with their customers – in agribusiness, fishing or mining – who need to wrestle with carbon measurement and reduction. Their next target is local initiatives for biodiversity.
"The natural environment is worth three and a half times the value of the economy that we measure through GDP", says Joiner. "We’ve been robbing from that bucket to put money in the bucket we measure." These may be startling words from the CFO of a bank, but they exemplify an attitude that is slowly taking hold in the business world.
Tony Coleman, Non-Executive Director, AMP and Low Carbon Australia
Tony outlined the activities of Low Carbon Australia (LCA), which provides financial solutions and advice on energy efficiency projects, and also provides official accreditation for carbon neutral claims. LCA have $100 million initial funding available to support carbon reduction initiatives. They have a particular focus on upgrading non-residential properties to maximize energy efficiency. This area has huge potential for cost negative energy savings, and LCA can help overcome the barriers of upfront costs and split incentives.
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Ian Dunlop, former CEO of the AICD
Ian gave us a sobering reminder of the magnitude of the challenge that we face in tackling climate change and the extent to which the long-term effects – and the actions required to avoid those effects – are vastly understated in most public discussion. The much-debated carbon tax does not come close to answering the extent of the problem. What is needed is not a mere incremental approach, but a transformation of the economy. While we argue over 5% reduction by 2020, 50% is needed by 2020; and 100% by 2050. This is the biggest business risk ever faced by Directors, yet it is being almost entirely ignored. Speaking on the panel discussion later, Ian pointed out that the assumption that a carbon price will drive up prices may not prove correct. While prices will rise initially, once companies start innovating in the response to the stimulus, we may well see prices fall.
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Jon Jutsen, Director, Energetics
Jon began by highlighting how inefficient most energy production is – in Australia we typically get about 8-9% in productive energy output from the energy we put in. This means there is huge scope for more efficient ways of generating and using our energy. For example, a localized cogeneration plant may be 3-4 times more efficient than energy delivered from a remote coal-fired power plant. Jon sees the culture of ASX100 companies starting to come around, with more looking at cost abatement analyses. The carbon price is expected to be a game-changer that may bring payback periods down from 8 to 3 years, making more projects economically viable.
Jon outlined the features of successful programs, which include: having a CEO with a vision for sustainability; linking that to the core business mission; stretch targets; staff engagement; clear accountabilities; effective measurement and reporting systems; an ROI hurdle set to encourage efficiency; competition; and partnerships with government and utilities (as seen, for example, in our Board Leadership award winner Qenos).
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