Many Australian businesses will scale back climate action when economy slows, survey finds

Australian companies are more likely to backtrack on their carbon reduction efforts when the economy slows than their global counterparts, according to a survey of 700 companies in 14 countries.

However, Deloitte’s gauge of private companies with annual revenue between $250 million and $10 billion (AU$366 million and AU$14.6 billion) also found that around the two third of the 50 Australian executives surveyed supported new regulations and a crackdown on so-called greenwashing, both above the global average.

The 2022 climate update, taken just ahead of last month’s Cop27 climate conference in Egypt, also came ahead of the release of the latest Australian greenhouse gas data which showed the country’s emissions were nearly flat over the past year. the year until June. Pollution totaled around 486.9 Mt of CO2 equivalent, 0.1% or 0.4 Mt of CO2 equivalent more than a year earlier.

A 3.7% reduction in emissions from the electricity sector as renewables increased their share was offset by increases in pollution from the oil, gas and agriculture sectors, said the government last week.

Although Australia still falls short of the Albanian government’s legal target of reducing emissions by 43% to 2005 levels by 2030, many Australian companies would reduce their own climate measures due to higher inflation. or other economic problems.

One in five Australian companies surveyed by Deloitte said they “will need to significantly reduce their efforts over the next 12 months”, compared to a global average of 12%. A further 12% said they would “temporarily” pause these efforts – with the aim of resuming them in a year – compared to 8% overall.

Yet 42% of Australians surveyed expected to step up their sustainability action in the coming year, slightly above the global average of 37%.

While the IMF and others predict that Australia’s economy will perform relatively well in 2023 and beyond, the country’s greater dependence on fossil fuels than some of the other 13 countries surveyed means the task of decarbonization “is much harder for us,” Pradeep Philip, head of Deloitte Access Economics, said.

When asked to what extent their business could continue to grow while reducing emissions, around one in 10 Australian executives strongly agreed that they could, compared to one in four globally. The “agree” response was about 50% for both.

Companies that failed to act still face financial risks, as detailed last week in the Australian Prudential Regulation Authority’s latest climate vulnerability assessment, Philip said.

“Inertia is not an option – standing still means you are stepping back,” he said. “The factors driving this energy crisis won’t last forever, but when it comes to reducing emissions, we can’t sit idly by and wait for the economy to improve. There is no time.”

Internationally, nearly two-thirds of leaders said there should be a crackdown on greenwashing or making false claims about climate efforts. Australians surveyed agreed at a slightly higher rate, at 68%, with 60% saying the problem had become “serious” in their own industries.

Partly to curb such chicanery and accelerate decarbonization, most companies favored more regulation – contrary to their usual aversion.

Globally, 55% of leaders said governments could encourage businesses to tackle climate change by implementing “new regulations and policies”, while just over half wanted a tax on climate change. carbon, said Philip. Among Australian peers, the share wanting more regulation was higher at 64%, with support for a carbon tax not much lower than average at 46%.

Despite Australia’s challenges in weaning the nation off fossil fuels, leaders were closely aligned with their international counterparts in foreseeing the long-term benefits if they did. According to the survey, some 92% of respondents “agree” or “strongly agree” with these expectations, compared to the global average of 87%.

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