At today’s annual general meeting in in Melbourne, Macquarie Group Chairman Peter Warne made the startling admission that he “was not familiar” with the recommendations of the Financial Stability Board’s Task Force on Climate-related Disclosures (TCFD). While the TCFD may not be well known in the wider community, its work and recommendations should be well understood by those in the finance world, whose businesses face massive risks due to climate change.
The TCFD recommendations are intended to guide how businesses measure and disclose their exposure to the financial risks posed by climate change in an effort to reduce the chance of climate-related financial losses. The recommendations have been adopted by the G20, signalling just how serious the international community considers the issue of climate risk.
Macquarie Group’s climate-destroying activities don’t often get the same recognition as those of the big four bank peers. But Macquarie plays a significant role in the fossil fuel industry through project and company financing, infrastructure investments and even extends to part-ownership of oil and gas producer Quadrant Energy. As a major fossil fuel player across a number of it’s businesses, it is incumbent upon Macquarie to be fully cognisant of the risks the fossil fuel and financial industries face due to climate change. For the company Chairman to be unaware of the TCFD – considered the international authority on dealing with climate risk – demonstrates a worrying lack of risk management.
Can’t commit to two degrees
Unlike the big four banks, Macquarie hasn’t publicly supported the Paris Agreement’s aim of holding global warming to less than two degrees above pre-industrial temperatures. In response to shareholder questioning on the issue, Chairman Peter Warne refused to make the same commitment to support the 2°C limit as Macquarie’s peers have done. Warne’s excuse that Macquarie could have little direct impact on the world’s ability to meet the Paris Agreement fails to recognise the supporting role the business plays in many areas of the fossil fuel industry, nor the symbolic power such a public commitment from a major company can have.
Coupled with the group’s apparent lack of climate-risk management, Macquarie’s failure to commit to two degrees shows how far the company is lagging on its approach to climate change and the risks it poses.