Home > Whitehaven Coal pins hopes to catastrophic 4°C scenario

Whitehaven Coal pins hopes to catastrophic 4°C scenario

17 October 2019

17 October 2019

Australia’s biggest dedicated coal miner, Whitehaven Coal, went to great lengths to talk up the prospects of demand growth for its product at the company’s annual general meeting in Sydney today.

What the Whitehaven board failed to mention, however, was the fact that those demand projections are based on a scenario in which the world will be warmed by 4°C!

Ken Thompson, former Deputy Commissioner with Fire & Rescue NSW and representative to a UN advisory committee for disaster management, questioned whether the board had analysed the potential impacts on the company, its workers, and the broader community of the devastating climate-induced weather events that can be expected if the company’s coal demand scenario were to eventuate.

Both Chairman Mark Vaile and CEO Paul Flynn reaffirmed Whitehaven’s belief that the IEA’s 4°C warming scenario was the most appropriate base case for the company to use. While neither was able to point to any physical climate risk analysis undertaken by the company, Flynn claimed the company’s crisis management plan left it “well prepared for these types of eventualities,” referring to the increasing frequency and severity of extreme weather events caused by global warming.

Even at 2°C of warming, the expected increases in temperatures, drought conditions, bushfires, extreme storms and flooding in Australia would be devastating. Allowing warming increase to 4°C would be catastrophic.

Does your super fund invest in Whitehaven Coal? Find out and take action!

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Your message to your super fund (you can personalise and amend this, your name will be automatically added at the end)*
I want to make sure my money is invested in companies and projects that are compatible with a safe climate future, and not causing major environmental damage. I do not want my money used to help finance the expansion of coal mining when we desperately need to phase out coal to meet the goals of the Paris Agreement. I therefore insist that you divest all holdings in Whitehaven Coal. Otherwise, I will be forced to look for a super fund that will not use my retirement savings in such a reckless and shameful way. Investment in Whitehaven Coal is a vote of support for the company’s business model. That business model is predicated on the failure of the Paris Agreement. I cannot in all conscience allow my retirement savings to support Whitehaven Coal’s plans to expand coal mining when the world desperately needs to transition to clean, renewable energy sources. Whitehaven justifies its plans to expand coal mining by referring to a demand scenario that’s consistent with 3°C of warming by the end of the century. Even 2°C of warming would expose 37% of the world’s population to extreme heat, while 32-80 million people would be exposed to flooding from sea level rise, and an extra 411 million people would face severe drought. 2°C would also spell the death of the Great Barrier Reef, and massive biodiversity loss. The 3°C warming scenario Whitehaven is using to justify its operations would be catastrophic. Investors and other stakeholders have tried for years to change Whitehaven Coal, but nothing has tempered the company’s plans to expand coal mining. No amount of engagement is going to bring Whitehaven’s business plan into line with the Paris climate goals. Expanding coal mining and climate action are entirely incompatible. I will be contemplating whether or not I should remain with you over the next fortnight and your response will help inform my view. Sincerely
Your message to HESTA (you can personalise and amend this, your name will be automatically added at the end)*
I want to make sure my money is invested in companies and projects that are compatible with a safe climate future, and not causing major environmental damage. I do not want my money used to help finance the expansion of coal mining when we desperately need to phase out coal to meet the goals of the Paris Agreement. It is also imperative that we limit the disastrous health impacts caused by a warming planet and coal pollution. Hesta’s decision in 2014 to restrict coal investments was an important first step. But the time has long passed for you to finish the job and get out of coal completely. I therefore insist that you divest all holdings in Whitehaven Coal. Otherwise, I will be forced to look for a super fund that will not use my retirement savings to prop up the dirty fossil fuel industry. Investment in Whitehaven Coal is a vote of support for the company’s business model. That business model is predicated on the failure of the Paris Agreement. I cannot in all conscience allow my retirement savings to support Whitehaven Coal’s plans to expand coal mining when the world desperately needs to transition to clean, renewable energy sources. Whitehaven justifies its plans to expand coal mining by referring to a demand scenario that’s consistent with 3°C of warming by the end of the century. Even 2°C of warming would expose 37% of the world’s population to extreme heat, while 32-80 million people would be exposed to flooding from sea level rise, and an extra 411 million people would face severe drought. The 3°C warming scenario Whitehaven is using to justify its operations would be catastrophic for the health of our planet and its population. Investors and other stakeholders have tried for years to change Whitehaven Coal, but nothing has tempered the company’s plans to expand coal mining. No amount of engagement is going to bring Whitehaven’s business plan into line with the Paris climate goals. Expanding coal mining and climate action are entirely incompatible. It’s time to finish the coal divestment job to stay ahead of the curve, and on the right side of history. I will be contemplating whether or not I should remain with you over the next fortnight and your response will help inform my view. Sincerely
Your message to Vision Super (you can personalise and amend this, your name will be automatically added at the end)*
I want to make sure my money is invested in companies and projects that are compatible with a safe climate future, and not causing major environmental damage. So I was thrilled when Vision Super made the call to divest coal and tar sands last year, an important step towards bringing my retirement savings into line with the climate goals of the Paris Agreement. Obviously Vision Super needs no convincing as to the environmental and financial imperative to stop investing in coal companies like Whitehaven Coal. Can you please confirm to me that the coal and tar sands divestment has taken place, and that the fund no longer has any investment in Whitehaven Coal? Please also provide details of how and when the coal and tar sands divestment process occurred. Finally, I urge you to take the next step in aligning the fund with the Paris climate goals by divesting from any company that is expanding the scale of the fossil fuel industry. Sincerely
Your message to First State Super (you can personalise and amend this, your name will be automatically added at the end)*
I was pleased to learn that you have reduced the investment exposure of my retirement savings to Whitehaven Coal, but I insist you now go further and divest all holdings in Whitehaven Coal. Any investment in Whitehaven Coal is a vote of support for the company’s business model. That polluting business model is predicated on the failure of the Paris Agreement. I cannot in all conscience allow my retirement savings to support Whitehaven Coal’s plans to expand coal mining when the world desperately needs to transition to clean, renewable energy sources. Whitehaven continues to explain its plans to expand coal mining by referring to a demand scenario consistent with 3°C of warming by the end of the century. Even 2°C of warming would expose 37% of the world’s population to extreme heat, while 32-80 million people would be exposed to flooding from sea level rise, and an extra 411 million people would face severe drought. The 3°C warming scenario Whitehaven is using to justify its operations would be catastrophic for the health of our planet and its population. I know you and other stakeholders have tried for years to engage with Whitehaven Coal, but nothing has tempered the company’s plans to expand coal mining. No amount of engagement is going to bring Whitehaven’s business plan into line with the Paris climate goals; expanding coal mining and climate action are entirely incompatible. It’s time to completely divest from Whitehaven Coal, and any other company that is actively undermining the Paris climate goals. I will be contemplating whether or not I should remain with First State Super over the next fortnight and your response will help inform my view. Sincerely
Your message to VicSuper (you can personalise and amend this, your name will be automatically added at the end)*
I want to make sure my money is invested in companies and projects that are compatible with a safe climate future, and not causing major damage to the health of our planet and its occupants. I do not want my money used to help finance the expansion of coal mining when we desperately need to phase out coal to meet the goals of the Paris Agreement. I am particularly concerned the upcoming merger with First State Super will see more of my money being invested in companies like Whitehaven Coal, whose very future as a business depends on the failure of the Paris climate change agreement. I insist you divest all holdings in Whitehaven Coal prior to the merger, and commit to remaining divested afterwards. Otherwise, I will be forced to look for a super fund that will not use my retirement savings to prop up the dirty fossil fuel industry. Any investment in Whitehaven Coal is a vote of support for the company’s business model. That polluting business model is predicated on the failure of the Paris Agreement. I cannot in all conscience allow my retirement savings to support Whitehaven Coal’s plans to expand coal mining when the world desperately needs to transition to clean, renewable energy sources. Whitehaven continues to explain its plans to expand coal mining by referring to a demand scenario consistent with 3°C of warming by the end of the century. Even 2°C of warming would expose 37% of the world’s population to extreme heat, while 32-80 million people would be exposed to flooding from sea level rise, and an extra 411 million people would face severe drought. The 3°C warming scenario Whitehaven is using to justify its operations would be catastrophic. Investors and other stakeholders have tried for years to change Whitehaven Coal, but nothing has tempered the company’s plans to expand coal mining. I appreciate VicSuper’s support for the 2018 resolution calling on Whitehaven to produce a Paris-aligned transition plan. But Whitehaven’s insistent opposition to this effort shows us no amount of engagement is going to bring Whitehaven’s business plan into line with the Paris climate goals. Expanding coal mining is entirely contrary to the climate action we need. It’s time to completely divest from Whitehaven Coal, and any other company that is actively undermining the Paris climate goals. I will be contemplating whether or not I should remain with VicSuper over the next fortnight and your response will help inform my view. Sincerely
Of course I want to get updates about this campaign from Market Forces!
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“We’ll be fine,” Whitehaven assumes

In its first ever sustainability report earlier this year, Whitehaven Coal has disclosed its climate change scenario analysis for the first time. The company found that under the International Energy Agency’s Sustainable Development Scenario, global seaborne coal demand will contract by 4.5% each year out to 2040.

Choosing to adopt a highly optimistic viewpoint, Whitehaven has assumed Australian coal will fare better than the global market – and its coal in particular will fare even better than the Australian average! However, the company has not disclosed any numbers that could help back up these bold claims.

The Sustainable Development Scenario in fact assumes an average of over 10 gigatons a year of negative emissions technologies used later in the century. This has been widely criticised as unrealistic, with carbon capture and storage (CCS) technology having failed to show any signs of viability. But when Whitehaven was asked whether it would analyse the impacts of a 1.5°C warming scenario that doesn’t assume widespread CCS, the board could not commit to doing this in the next year.

So where does this leave Whitehaven investors? They really should be questioning the company’s wild assumptions and doing their own homework – starting with the recent Climate Analytics report, which found coal power in Asia (Whitehaven’s only market region) must be phased out completely by 2037 under a 1.5°C scenario.

Risk management “plans“

“Are you genuinely planning to turn around a massive shift in the global financial system by claiming our coal reduces emissions?”

Whitehaven’s sustainability report recognises the risk decreasing access to funding and insurance, and a subsequent increase in costs of these services. This makes sense, given Australia’s three major insurers and our largest bank are all exiting the thermal coal sector by 2030 at the latest, and 40% of the world’s biggest banks and insurers restricting coal financing.

Unfortunately, Whitehaven’s stated plan to mitigate this risk with respect to thermal coal, is to “advocate the central role of high-quality Australian thermal coal in reducing global emissions.”

About this ridiculous plan, the board was asked, “Is this a typo, or are you genuinely planning to turn around a massive shift in the global financial system by claiming our coal reduces emissions?” But in response, Vaile merely repeated Whitehaven’s tired old lines.

The big question is, how much longer will financial institutions continue to believe the nonsense that burning more coal can actually reduce emissions in line with the Paris climate goals?

Take action! Find out if your super fund is among the many still invested in Whitehaven Coal.