15 November 2018
“We’ll be doing everything we can as a company to slow down climate change” Fortescue Metals Group (FMG) chairman Andrew Forrest told shareholders today.
Forrest’s proclamation at the company’s annual general meeting (AGM) was a respectable one, especially for a company that’s one of Australia’s major energy users. Under a microscope, however, the mining heavyweight’s work on climate still has a long way to go.
Although FMG recognises the financial material risk posed by climate change, shareholders are yet to see any “scenario analysis” that stress tests the company’s assets against different climate scenarios, including one in which global warming is kept well below 2°C in line with the Paris Agreement.
And while Fortescue CEO Elizabeth Gaines did commit to delivering such analysis in the future, she prefaced it by saying: “I won’t sit here right now and give you an absolute timeline [on delivering analysis]”. Later, she also claimed that the science was “evolving.”
Even partial scenario analysis is valuable to shareholders. The science may well be evolving but it’s not a good enough reason to delay any analysis using what’s currently available. Many other companies are already doing so.
Forrest made clear though, that the company was vehemently against coal – a striking statement that will no doubt draw ire from sections of Australia’s fossil fuel industry.
The chairman told shareholders: “We have been offered dripping roast financial returns in the form of thermal coal, and we haven’t taken it. We see coal as very much last century and we are working very hard on what I call new energy.” Watch below:
By “new energy”, maybe Forrest is referring to liquified natural gas (LNG). The FMG chairman has a AUD $200-300 million LNG floating gas import terminal planned for Port Kembla in NSW.
LNG is not a renewable source of energy but when talking about renewables, Elizabeth Gaines said that FMG itself has recently converted its Solomon mining site’s power station to run on LNG and has begun using the Fortescue River gas pipeline. Watch below:
Simultaneously, Forrest has directed $100 million dollars to ocean conservation efforts via his Minderoo Foundation and research vessel the Pangaea Ocean Explorer. At today’s AGM, he emphasised to shareholders that: “I’m hugely concerned about ocean deoxygenation myself.”
You have to applaud Forrest for his marine conservation efforts, but it appears he has overlooked a major issue. The increased use of LNG is contributing to Australia’s rising emissions and, by association, global warming.
Climate change is probably the most destructive force faced by the world’s oceans, with effects like climate-driven ocean acidification deemed “an almost unprecedented geological event” for the health of the oceans.
Forrest’s main concern – deoxygenation, is a result of ocean surface temperatures rising. Deoxygenation zones are expanding – and will have profound ecological consequences for marine life.
LNG is the major contributor to Australia’s rising emissions according to new data. Its rising emission profile will countermand the carbon pollution avoided through Australia’s renewable energy target and it has been the main driver behind a 6.8 million tonne increase in greenhouse gas emissions between 2017-2018.
Forrest’s twin pursuits appear very much incompatible.
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