Tell that to ASIC

Matt Canavan, quite rightly, has issued a warning to big business:

Federal Resources Minister Matt Canavan has warned big business not to form its own policy on greenhouse gas emissions in the wake of the dumping of the National Energy Guarantee, telling it to leave policy to the democratic process.

Responding to an unsourced Fairfax Media report that the nation’s biggest energy companies had begun talks on a self-regulated package to reduce greenhouse gases through the Business Council of Australia, Senator Canavan advised the big corporates to have “a bit of humility.”

But … I suspect many big businesses are being driven to do so by a government agency:

The corporate regulator has encouraged companies to go beyond meeting strict legal requirements and voluntarily disclose climate change risks and opportunities to the market.

Australian Securities and Investments Commission commissioner John Price told a Centre for Policy Development forum on Monday night that in addition to the strict legal requirements, companies should also “carefully consider the general information needs of investors” when it comes to disclosing climate risks.

So what is Business to do? Respect the democratic process, or respect the undemocratic regulatory agencies that will drag them through the courts?

This entry was posted in Economics and economy, Oppressive government, Rule of law, Shut it down. Fire them all.. Bookmark the permalink.

26 Responses to Tell that to ASIC

  1. Pyrmonter

    Huh?

    Libertarian argues for government intervention and against civil society, the very sort of ordering one might expect to develop ‘from below’?

    I’m sure there’s a rent-seeking devil in the detail, but the idea that government will do better turns a century of insight from the socialist calculation debate by way of public choice on its head.

  2. stackja

    Close all business down. ASIC no longer needed. No business. No workers. No unions.

  3. …voluntarily disclose climate change risks and opportunities to the market…

    Who foots the bill and the blame when the climate scam eventually unravels? All the ‘scientists’ and their organisations that set the climate agenda and insist that companies should follow their guidance on what it likely to eventuate should be held professionally liable for failure. This is no different to a contractor using their specialised knowledge, backed by professional indemnity insurance, advising a company on what the company should do. If the former are so certain that what they say is likely to happen, then they should back it up with sufficient insurance.

  4. Sinclair Davidson

    Canavan isn’t a libertarian, he’s a conservative.

  5. The BigBlueCat

    My two cents worth – big business can make whatever decisions they wish that are right for their business – whether or not that aligns with government policy or public perception is up to them. Of course they need to adhere to government regulations and law where they apply, but in the absence of such they can do whatever they decide, and let their shareholders and stakeholders duke it out (if need be).

    I have no objections to Canavan or others to provide advice to big business – but until there are laws and regulations to the contrary, then big business should rightly tell the government to butt out.

    Of course, Canavan is concerned that big business will perpetuate climate change ideology – my advice to the LNP is to be very clear with the electorate what their stance is regarding carbon emissions, and if the science doesn’t support the claims, then make that clear also. Conversely, if they accept the science as reported by the IPCC, then be proactive and develop the policies and let the electorate decide.

    A message to ASIC regarding company declarations on climate risk – the answer could (and should) be anything in the range of “nothing” to “everything” (whatever applies, and whatever meets their shareholder’s expectations). FFS, investors and stakeholders can ask those questions at AGM’s, and frankly most investors are more concerned about shareholder value in the short term than they are in the long term. I note, for instance, that ANZ Bank does not list “Climate Change Risk” on page 35 of their 2017 Annual Report apart from “the social or environmental (or both) impacts of our lending decisions” and “We have well established decision-making frameworks and policies to ensure our business decisions are guided by sound social and environmental standards that take into account Reputation Risk” both of which are very nebulous statements. But clearly they don’t think “climate change risk” and how they address it requires any significant disclosure.

    The advantage of investing in listed companies is that you can sell shares virtually straight away to any willing buyer, and any threat (climate change, economy, CEO/company performance, loss of customers, uncompetitive products/services, etc) should be part of their investment decision process.

  6. H B Bear

    The corporate regulator has encouraged companies to go beyond meeting strict legal requirements and voluntarily disclose climate change risks and opportunities to the market.

    What the fvcking fvck? Remember the is the same ASIC presently being excoriated in the banking Royal Commission for utterly failing to effectively administer and enforce existing laws.

  7. gbees

    “disclose climate change risks and opportunities to the market”

    My Report:
    Climate change risks – NONE
    Climate change opportunities – plenty of rent seekers.
    End of Report

  8. Roger

    my advice to the LNP is to be very clear with the electorate what their stance is regarding carbon emissions, and if the science doesn’t support the claims, then make that clear also. Conversely, if they accept the science as reported by the IPCC, then be proactive and develop the policies and let the electorate decide.

    If only the LNP could be so decisive. In fact they are rent by internal divisions over climate change, which is why Morrison is thus far sitting on the fence, an uncomfortable position he is, however, well practiced at.

  9. Mother Lode

    What the fvcking fvck? Remember the is the same ASIC presently being excoriated in the banking Royal Commission for utterly failing to effectively administer and enforce existing laws.

    It seems a commonplace rebuttal of organisations caught out not being able to enforce existing rules that they need more rules to be put in place so they police the original ones that were apparently already too much for them.

    The end game, of course, is to have 75% of Australia working in bureaucracies demanding comprehensive paperwork from the other 25% for every little thing they do. There might be a few special plans to help out. For example, instead of expecting shop owners to turn up every morning for their $25 Permission to Open, you might instead offer a weekly.

    This would be because you wouldn’t want to overwork a bureaucrat.

  10. Pyrmonter

    Matt Canavan is certainly no Libertarian, nor liberal. Whether he’s a conservative is something for discussion over a bottle or three of decent GSM (I’d wager he’s an agrarian socialist with a dose of right-populism).

    My comment concerned this:

    ‘Matt Canavan, quite rightly, has issued a warning to big business

  11. BoyfromTottenham

    I am waiting with bated breath for the leaders of our heavy industries to wake up to implications for them of the ‘phase out fossil fuel generation’ meme. Although many (about 200 categories I think) currently benefit from broad exemptions to the pernicious LRET imposts, the more important fact is that many essential industries such as metal refining, cement and brick making and the like absolutely cannot operate without large to very large amounts of reliable base load power – think about the vast electrical energy needs of aluminium refining or steelmaking. Not to mention the chemicals, fertiliser, plastics and pharmaceuticals industries that rely on natural gas as an essential feedstock. No developed country (especially an island like Oz) can sensibly exist without these industries. If they were forced to close down we might as well be living in a third world country. But of course the promoters of this ‘no fossil fuels’ nirvana never mention these trivial realities.

  12. Pyrmonter

    No developed country (especially an island like Oz) can sensibly exist without these industries.

    GDP/capita (USD, PPP, 2017, IMF)
    Singapore – 90,531
    Ireland – 72,632
    Hong Kong – 61,016

    Australia – 49,882

    The idea that a country needs _any_ particular industry, and not to allow its firms to discover its areas of comparative advantage is socialist nonsense.

  13. The idea that a country needs _any_ particular industry, and not to allow its firms to discover its areas of comparative advantage is socialist nonsense.

    It may be more appropriate to say that no country can exist, in its current state of development, without the products of these industries.

  14. tombell

    if you have the stomach read ASIC report 593 “Climate Risk Disclosure by Australian Listed Companies”- here’s a synopsis
    “” Climate change is a foreseeable risk facing many listed companies in the
    Australian market in a range of different industries. Directors and officers
    of listed companies need to understand and continually reassess existing
    and emerging risks (including climate risk) that may affect the company’s
    business. This extends to both short-term and long-term risks.
    Listed companies should provide meaningful and useful risk disclosure to
    enable investors to make fully informed decisions. In some cases, the
    Corporations Act requires listed companies to disclose material business
    risks.”

  15. Directors and officers of listed companies need to understand and continually reassess existing
    and emerging risks (including climate risk) that may affect the company’s business. This extends to both short-term and long-term risks.

    One risk certainly stands out, unaffordable and unreliable energy.

  16. Sinclair Davidson

    Pyrmonter – ah. yes.

    Climate change – to the extent that it is a problem – is a collective action problem. Business should focus on making profits by serving paying customers. On the other hand, if business has a profitable solution to climate change then they should say so and roll out the business models. I suspect, however, that they have no such thing.

  17. Dr Faustus

    The Australian is apparently riffing off the Fin Review, which reports:

    Business to go it alone on energy, climate policy

    Under the auspices of the BCA Energy & Climate Change Committee:

    The nation’s energy companies and biggest electricity users have given up on politics and begun backroom talks about a self-regulated package of measures to reduce greenhouse gas emissions, restore energy reliability and improve investor stability.

    This move off the reservation has nothing at all to do with ASIC and its nonsensical ‘voluntary’ climate risk/opportunities disclosure requirements.

    The rent seekers companies concerned are desperate to keep the renewables dance going on their own terms. Given the abject policy hiatus within Canberra, they are attempting to create their own de facto policy which pays lip service to Paris and ‘lower energy prices’ and encourages the build out of lots more renewables yielding the subsidised (and super premium) returns they are currently enjoying.

    Most importantly, by appearing to be proactively managing what is becoming a full blown political energy crisis, they are hoping to fend off a Royal Commission into the electricity industry – and to manage the risk that a future Shorten Government will be tempted to introduce regulated returns to achieve the political goal of lowering Australian energy prices.

    Given they will be teetering around discussion of how to maintain price and returns in the energy and distribution markets, their greatest regulatory risk is the Trade Practices Act and the ACCC.

    Not that history shows that to be a serious threat.

  18. manalive

    The self-deluded Norwegians would have to be the most repulsively, hypocritically, smug greenies on the Planet; while the country is one of the world’s richest (much richer than Australia), runs on hydro with electric cars everywhere they are also one of the top fossil fuel exporting nations — their economy is dominated by oil and gas exports.
    Last time I looked coal was Australia’s top earning export, the country runs on fossil fuels, unlike the Norwegians we cannot keep deluding ourselves for long.
    Our economic welfare is almost wholly dependent on fossil fuels internally and as exports, Australians have to sort themselves out and cut the B.S.

  19. The BigBlueCat

    ANZ Bank does not list “Climate Change Risk” on page 35 of their 2017 Annual Report apart from “the social or environmental (or both) impacts of our lending decisions” and “We have well established decision-making frameworks and policies to ensure our business decisions are guided by sound social and environmental standards that take into account Reputation Risk”

    Quoting myself, I know … but … if ANZ and other company directors truly believed in the CAGW mantra, they ought to declare a significant risk as it relates to energy supply – for instance, the ANZ Bank cannot do business without electricity, and nor can many, many other businesses. If they really believed that there was a risk to electricity supply, either through the discontinuance of coal-generated electricity, or the supply of electricity via unreliable renewable sources, then we ought to think they would disclose such risks as being material. But they don’t – they merely pay a bit of lip-service to climate change risks to keep the regulator happy. Just goes to show how petty and pithy the issue is perceived by that bank.

  20. manalive

    Matt Canavan has warned big business not to form its own policy on greenhouse gas emissions in the wake of the dumping of the National Energy Guarantee, telling it to leave policy to the democratic process …

    A legitimate government responsibility is to restore genuine consumer choice in this case by requiring electricity retailers to offer their customers different supply rates based on generation source.

  21. BoyfromTottenham

    manalive – you may be right in principle but I’ll bet that pressure from half a dozen of Australia’s biggest exporters will have a lot more effect on the pollies than 10 million voters.

  22. Tel

    On the other hand, if business has a profitable solution to climate change then they should say so and roll out the business models. I suspect, however, that they have no such thing.

    It would be very easy to find a private business willing to roll out nuclear power in Australia, if government was willing to allow it. The obvious and profitable solution to the non-problem is already well known… it just happens to be illegal right now.

  23. …nor can many, many other businesses…

    I doubt that there’s any business in existence today that can continue without power. Even a small business whose power is interrupted can suffer measurably.

  24. BoyfromTottenham

    Tel,
    I heard a rumour several years ago that BHP were considering building a nuclear power station to provide the necessary reliable power for their planned huge Olympic Dam copper, silver & gold and uranium mine expansion. The mine, which contains world-class deposits of these minerals, does and and will no doubt continue to produce yellowcake, which with some processing would provide the uranium fuel for the reactor, so it would be a very efficient setup. They could send excess baseload power into the SA grid via the existing powerline, by simply reversing the current flow direction. As you said, it just happens to be illegal right now. But with rising power prices, at some stage the economics will be irresistable.

  25. JohnA

    “ Climate change is a foreseeable risk facing many listed companies in the
    Australian market in a range of different industries…”

    A risk has to be quantifiable as a cost to the business and a realistic threat before it can be “foreseeable”.

    I don’t see risk assessments of road accidents involving their staff, for example, which are realistic and quantifiable but (more to the point) they are not VIEWED AS a financial threat to the employer.

    As others have said the real risk (imminent) is the loss of reliable power when they want to draw upon it.

  26. The BigBlueCat

    JohnA
    #2836918, posted on October 11, 2018 at 8:02 pm

    As others have said the real risk (imminent) is the loss of reliable power when they want to draw upon it.

    One might think that Alcoa saw a significant operational risk relating to the impact of renewables on the cost and reliable supply of electricity to their Point Henry smelting operations – their way out was to shut it down. Portland may well be next. But no need for a risk declaration though – Portland is a joint venture, not a listed company.

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