25 May 2018
‘According to Coastal Risk Australia, sea level rise is expected to flood parts of the Sydney Airport runway. This flooding occurs even in the low scenario, where the expectation is that there would be a worldwide reduction in global emissions. What current modelling is our company using for this, and when will this information become available to shareholders?’ A shareholder asked today at the Sydney Airport annual general meeting.
The chairman Trevor Gerber made the serious question into a joke. ‘I’ll tell you this – I was out there yesterday, it’s still above water so we’re in good shape so far. As for the future modelling, I’m not sure it will happen whilst you and I are still breathing…..I don’t think it’s much to be concerned about today.’
Protecting the runway from inundation or moving it to higher ground pose massive costs and disruption to the airport’s business, so it’s concerning that the chairman isn’t taking it seriously.
There was confusion amongst the board as to whether the company had committed to supporting the recommendations of the Financial Stability Board’s Task Force for Climate Related Financial Disclosures (TCFD). Market Forces’ research shows that, while Sydney Airport officially supports the TCFD, it has so far largely failed to deliver on the Task Force’s recommendations.
The TCFD was created to provide a robust climate risk reporting framework, with particular focus on industries considered high risk. Transport, and therefore Sydney Airport, was included as one of the high risk categories.
A shareholder asked ‘Is our company planning to publish information on all relevant TCFD recommendations and provide us with the time-frame of when these disclosures will be made public?’
Initially the CEO Geoff Culbert completely ignored the question – instead speaking about other initiatives the company had signed up to. When the shareholder push the CEO that he hadn’t actually answered the question, chairman Trevor Gerber said ‘we will be signing up to it.’
The CEO Geoff Culbert corrected him with ‘we have signed up to it.’
They were both unable to give a time frame for implementation.
The board’s uncertainty around disclosure of climate change risks doesn’t fill shareholders with confidence that these risks are being adequately considered and managed. Sydney Airport operates in a sector defined by the TCFD as ‘high risk,’ and it is clear from Trevor Gerber’s comments on the airport flooding that the board is not taking climate change risks seriously.