11 October 2017
Major energy user Bluescope Steel made the right noises about limiting emissions at the company’s AGM in Melbourne today, but failed to commit to strong climate action. Despite clear evidence that a global transition away from fossil fuels is required to keep warming below 2 degrees, Bluescope has been calling for the government to incentivise the ongoing operation of coal fired power stations.
In response to shareholder questioning, Chairman John Bevan confirmed that the company views climate change as a business risk, but didn’t go so far as saying that the auditors had considered climate as a material business risk in preparing the company’s 2017 Financial Report.
Bluescope is a steel producer with operations in Australia, New Zealand, the Pacific Islands, North America, and Asia. It is one of Australia’s major energy users, requiring significant amounts of energy for their smelting, furnace and production operations. It seems contradictory that Bluescope would regard climate change as a risk to its business but still push for emissions intensive power sources that would make the company more susceptible to climate risk, such as increased costs due to carbon pricing.
The board failed to commit to implement recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), asking shareholders to wait until they release their next sustainability report. According to the Chairman, the upcoming report will provide more climate risk disclosure, but he did not go so far as to provide any commitments relating to the TCFD recommendations.
One of the major TCFD recommendations was that companies conduct and report the results of carbon-constrained scenario analysis. The board was questioned by a shareholder as to whether they conducted scenario analysis within the 2 degree framework, and when such an analysis might be released to shareholders. The Chairman’s avoidance of that question doesn’t fill us with confidence…
In its’ latest Sustainability Report, Bluescope said ‘We regard climate change as a global problem that requires a global response. Bluescope is focused on reducing its energy consumption and carbon emissions’. Further efforts, such as committing to implementing the TCFD recommendations and, in particular, releasing scenario analysis to shareholders, are necessary if the company wants to prove to shareholders that it can play its part in reaching zero net emissions by 2050 as stipulated in the Paris Climate Agreement.
With Bluescope’s promising to disclose more about their work on climate in their next sustainability report in early 2018, shareholders will be watching with interest.