Posts Tagged ‘climate change’

climate change and director responsibilities

When the evidence for anthropogenic climate change is no longer in dispute, it is unthinkable that there are directors of publicly listed companies who admit to be climate change deniers.  There is no longer any scope for deniers to cling to their ideological positions, even if encouraged by sceptics in Government, certain political donors and their sympathisers. See an earlier post on conservative ideology and climate change.

Some recent work by a special counsel at Minter Ellison, Sarah Barker, has highlighted the fact that climate change deniers who are company directors are likely to breach their duty of care.

Sarah has two decades experience on advising governance, disclosure and fiduciary duty issues and was recently acknowledged by the United Nations PRI for her recent work on directors duties and climate change.

As Chairman of Regnan, Australia’s leading governance advisory and engagement body, I am particularly interested in Sarah’s paper and its implications for corporate Australia. The abstract, quoted with permission, reads as follows:

“The science relating to anthropogenic climate change is no longer in credible dispute. With its physical and economic impacts increasingly observed, the attention of legal commentators has begun to broaden from responsibility for emissions mitigation to liability for climate change induced harms.

 At the same time, Courts are demanding higher standards of proactivity and engagement from corporate boards in order to satisfy their statutory directors’ duties.

This paper combines, and extends, those two areas of scholarship by examining whether common corporate governance approaches to climate change may contravene directors’ primary duties under Chapter 2D of the Corporations Act.

 It concludes that, even where directors’ subjective bona fides are not in question, passivity, reactivity or inactivity on climate change governance is increasingly likely to contravene the duty of care and diligence under section 180(1) of the Corporations Act, and increasingly unlikely to satisfy the ‘business judgment rule’ defence under section 180(2). This includes governance strategies that emanate from climate change denial, a failure to consider its impacts due to ignorance or unreflective assumption, paralysis caused by the inherent uncertainty of its magnitude and timing, or a default to a base set by regulators or industry peers. In addition, even considered decisions to prevail with ‘business as usual’ are increasingly unlikely to satisfy the duty (or the business judgment rule defence) – particularly if they are the product of a conventional methodology that fails to recognise the unprecedented challenges presented by an erratically changing climate. In addition, whilst unorthodox, it is reasonably arguable that a failure to actively consider the impacts of climate change may also breach the duty to act in good faith in the best interests of the corporation under section 181.

 Accordingly, directors who do not proactively respond to the commercial risks and opportunities of climate change, now, may be held to account under the Corporations Act if corporate value becomes impaired into the future”

 Maybe activist investors will start to demand  board change and directors who are climate change deniers will eventually be forced to step aside. A better outcome would be for them to acknowledge  that their own views and the overwhelming scientific evidence are at odds, and to further reflect on that Sarah’s paper may have implications for them.

climate change attitudes part two

climate change attitudes part two

Encouraged by responses to my blog post last week on the role of ideology in driving opinions on climate change, I feel the need to follow up with another post based on the release of Lowy polling over the weekend. Why does community concern about climate changed appeared to have softened in Australia?

The annual Lowy Institute Polls on public opinion are useful background information. In the 2007 poll, Australians ranked tackling climate change as the equal most important foreign policy goal. In the same poll in 2009, it ranked seventh out of ten possible goals.  In the 2011 poll, released this week, 39% of Australians were not prepared to spend a cent on global warming, with the numbers prepared to take action even with “significant cost” falling from 60% (2008), to 41% (2011). What’s happened?

Remember the Howard Government’s plans to commence an Emissions Trading Scheme (ETS) in 2007? Despite differences of opinion around the edges, there appeared to be general bipartisan recognition of the issues and the need to act through a market based mechanism. It was carried forward by Rudd and Turnbull in their respective leadership roles. What has changed? In my view, it’s mostly to do with politics and communication.

Although climate change remains a complex and challenging issue around the world, in Australia and to a certain extent in the USA, the debate has been politicised and people’s inner worldview, and the opinions of their peer groups has prevailed. Apart from some of independent thought, people have now tended to line up along traditional conservative and progressive lines. The other driver of confusion, indifference and resistance has been the inability of the Rudd and Gillard Governments to adequately articulate the issues and the case for action – a disappointing lost opportunity for the Government and Australia.

Why have things become more politicised in recent times? In my blog post last week, I discussed the reasons why many conservatives may push back from acceptance of, and the need to act on, Anthropogenic Global Warming (AGW).The theme I didn’t develop is the disproportionate influence of the religious right, many of whom adopt literal interpretations of the bible such as, “the world will end when God is ready”. It underpins the mindsets of many in the Tea Party in the USA and conservatives in Australia with strong influence. It is proving to be a significant contributor to the polarisation and politicisation of the issue.

Other contributors are some of the positions offered by the “dark greens”, who tend to crusade on issues rather than see them in the context of a dynamic and finely balanced economy. This causes reactions, push back and further polarisation. We need to understand the respective positions, debate the issues, play the ball not the man and work together with open minds. Failure to do so will cause more and more people to switch off altogether.

Of course it’s hard for people to give things up to fight a cause which is difficult to see and understand. AGW is a global issue and there are now more than 30 countries with an ETS or some form of carbon tax and many more without such measures. While there is a majority belief that action needs to be taken by Australia on climate change (latest CSIRO survey), this belief seems tempered by the respondents’ key concerns about the cost of living and financial hardship.

Perhaps the essential challenge for society is to clarify the relatively minor costs of acting now compared to those of acting later. We need to find a path forward that proactively addresses the needs of individuals while encouraging action on climate change.

In Australia, the polarisation and politicisation of AGW is disappointing and short sighted. Both sides of politics are guilty and should lead the chorus of apologies to our children for our collective inability to lead, build consensus and act. The apologies will be all too late when decision makers “get it” in 20 years; when people can actually see that the melting of the polar ice caps has caused devastation to hundreds of millions of human beings; when they can ultimately see before them the outcomes that the ostriches said wouldn’t happen in 2011.

Sadly, by then it may well be too late to save this planet from irreversible damage. Sometimes it is necessary to lead rather than look in the rear vision mirror and ask people what they think. To reinforce the point, watch James Hansen talking with David Letterman in an entertaining yet disturbing treatment of the subject.

Seduced by the prospect of power at the next election, both sides of Australian politics have dropped the ball. The Government has done a lousy job in building consensus and articulating why they feel the need to act. The Opposition has passed up a once in a generation chance to show bipartisan leadership on an issue which will affect the planet, and the lives of all future generations.

conservative ideology and climate change

conservative ideology and climate change

I see that lobbyists are paying to bring Christopher Monckton – the high-profile climate denier – on another speaking tour of Australia. Earlier this month, Monckton accused Australia’s climate advisor, Professor Ross Garnaut, of being a fascist. People’s behaviour in the climate change debate, or what passes for sensible debate in this country, has been interesting and frustrating. Denial and spoiling tactics have been adopted by people who seem to carry an agenda. It is an immutable fact that the vast majority of these people are conservatives and reactionaries, rather than progressives and true liberals. Apart from their characteristic resistance to change, I’ve struggled to understand this particular conservative rationale and driving purpose, until reading the insights presented by Tim Dean in the Drum in March 2011.

 My blog post is stimulated by his piece, but largely expresses my own frustration with the situation we find ourselves in today. Of course, these views don’t apply to all climate change deniers or all conservatives. I am trying to understand the motives of deniers rather than to bash them. It is not about conservatives being bad and progressives being good. Clearly all conservatives and progressives don’t think and behave in the same way and not everyone will agree with this generalisation of the conservative view, however analysis of specific demographics, ideologies and patterns of behaviour can be instructive.

Why is it that so many conservatives appear immune to the overwhelming scientific evidence and rational argument that suggests Anthropogenic Global Warming (AGW) is real? The answer may lie in the fact that to conservatives, climate change is not about science or economics – it is about an ideology and politics, as Clive Hamilton points out in his book “Requiem for a Species”. Most of us decide at some time or other where our political beliefs sit and rarely stray from this belief. When a concept like AGW comes along, we tend to reference our political belief system before assessing the evidence. When facts don’t support the pre-existing belief system, then the facts must be wrong! Often rational thought processes are subsumed in the emotional responses to challenges to a political belief system or to our implicit worldview. AGW represents a fundamental threat to the conservative ideology or worldview. Denying it doesn’t make climate change go away, it only makes dealing with it even harder, for us and future generations. There is also an argument that the more climate change is associated with the Greens, the left and environmentalists, the less comfortable conservatives are about embracing it.

 Various Newspoll and other polls have consistently shown that a big proportion of the conservative demographic behaving as climate change deniers, are over 50 year old males. Why? Maybe they want to eliminate challenges to their comfortable existence, despite the consequences for future generations, at any cost. Dealing with climate change is uncomfortable for many of them as it requires, at least to some degree, embracing social consciousness and stepping away from selfishness and mass consumerism. Unfortunately the vested interest of many conservatives is so strong that only climate related disasters of increasingly devastating magnitude, which personally affect them, will have any chance of changing their world view.

 The one thing that intrigues me is the veracity of their sense of purpose on this issue and their relative indifference to other issues. Maybe it relates to control – one thing this demographic holds disproportionately strongly. The thought of losing control of control, control of wealth, and control of assets certainly sharpens their minds, as do potential changes in power relationships in society. But have they really thought things through? Ironically, conservatives have the most to lose from the impact of AGW, as they control most of the money! Why can’t conservatives see nature as an asset that supports humanity? Failure to do so is to support an unsustainable world. Perhaps, as Lewansoky points out, conservatives with a free market ideology will be more able to accept AGW science when it is framed in a favourable context (lots of technology, opportunities to make money etc.)

 In even further irony, the tactics many deniers adopt, either deliberately or unknowingly, generally become supporting proof for the issue they are trying to discredit. Spoiling tactics take on many forms including exaggeration of potential harm, use of irrelevant issues, appeals to personal freedom and magnifying disagreement among scientists. Suddenly, non-scientists claim that science is about opinion rather than fact. Or they talk of the need for more peer review. Clutching at straws, they selectively search the haystack to find the needle represented by a dissenting scientist. Whether by ignorance or spoiling, they confuse weather patterns with climatic change. They confuse El Nino and La Nina cycles, and Ice Age effects, with AGW. They reserve the right to “make up their own minds” on this issue, while accepting what science says as the truth on other issues.

When their arguments start to flounder, they resort to saying that Australia (as the biggest per capita polluter in the world) shouldn’t act because the rest of the world isn’t acting! You should see the massive greenhouse gas reduction programs in the latest 5 year plan for China!! When all else fails, they play the man rather than the ball, attacking the motives and integrity of the scientists.  Assisted by News Limited media and “shockjocks”, who have irresponsibly confounded the debate on this subject in Australia, they throw mud so that some sticks, causing doubt where there should be acceptance and a desire to understand more and seek the best solutions. Please forgive me for drawing the analogy with conservative Anglicans who thought that Darwin was a left wing activist as he used massive amounts of scientific evidence to overthrow dogma and ignorance.

 Perhaps we should cut some slack to those people not trained as scientists, because they don’t know what they don’t know. Doing post graduate science, I can remember my professor saying, “a science graduate is a person who is introduced to bodies of knowledge in such a way that he or she can continue to relate to them”. The undergraduate degree taught us to gather evidence, test, analyseand think in a logical way and establish hypotheses that can be subsequently confirmed. I’ve heard deniers and sceptics who claim to have better knowledge and the right to be heard as they have “read many books on the subject”, yet understand neither the concepts of theory, probability and proof in a scientific context. It’s amazing how many of them believe they have the technical and intellectual capacity to look at the data themselves and arrive at the correct conclusion, and how their conclusions are radically different to those with the relevant training and expertise. Then there are others – people with a genuine desire to learn, who are vulnerable to manipulation by legitimate sounding conservatives without adequate science, and to the propaganda of some hard line Christians and the resources sector lobby.

 Climate change deniers don’t have a mortgage on being selective in the information they seek and use to support their ideologies. While progressives are more accepting of the science, they can also be selective in mounting their arguments, and can also be driven by their own worldview. So how do we break the deadlock of our implicit, and often irrational, worldviews or our political attitudes? The circuit breaker is awareness. When considering an issue such as AGW, we should pause and reflect on whether our feelings are inspired by evidence and reason, or by a strong emotional inclination. Think about how we’re approaching the issue, and how we’re injecting it with value, and the benefits of keeping an open mind.

 Science has established beyond a reasonable doubt the existence of the greenhouse effect (without which our planet would be a frozen wasteland), increases in CO2 levels produced by humans and increases in global average temperatures. The science has also established, on the balance of probabilities to at least a 90% level, that humans are the primary cause of that change. We should be at consensus on this point and now be sensibly considering what action to take. That’s the subject of another blog post.

reality of climate change - the trees don't lie

reality of climate change – the trees don’t lie

A few weeks ago, I was standing in awe of the forest giants in the world’s second largest temperate rainforest, the Tarkine, in Tasmania’s north-west. Little did I know that these trees are silent recorders of the environment. Not until Mike Peterson, an experienced forester, unlocked the secrets of dendrochronology – or tree ring analysis.

Many trees produce a single ring of growth in a year. Because climate and environment affect the way trees grow, the size of the annual rings varies from year to year. Dendrochronology requires knowledge of the exact years during which individual rings grew, which is achieved by carbon dating technology. In Tasmania, 1500 year old Huon pines from Mount Read have been cored with a small 5mm increment borer, and with other samples from dead tress and partially buried logs in the stand, it has been possible for tree ring scientists to develop a chronolgy of more than 4000 years.

Climatologists use the statistical association between ring width and weather data to estimate climate variation in the past. Mike sidled up to the back of his ute and pulled out some cores from old Huon Pine specimens that dated back more than 1000 years. He then showed me his published work, in conjunction with the University of Tasmania, on temperature variation over this period. Guess what? There was about 0.5 degrees Celsius of average variation for the entire 1000 year period until we get to the 1960′s. From that time on, the tree rings suggest that temperatures have climbed an incredible 1.0 to 1.5 degrees Celsius in an unbroken upward trend line. The trees don’t lie. They are detecting and recording global warming, deep in the Tasmanian rainforest.

I was amazed at what I’d been shown, not that I need any convincing about global warming, and the contribution of man to it – and yet the sceptics continue to give our decision makers licence to stall action. John Quiggin (AFR Feb 3, 2011 – no hyperlink because of Fairfax content charging policy!) captures my perspective when he argues that “the spoilers generally lack the understanding of basic statistical analysis of trends in time series, or the fundamentals of the greenhouse effect. Worse, they haven’t bothered to learn”. Regardless of their scepticism in the light of overwhelming scientific evidence, it would be pretty hard for these people to mount effective arguments against the evidence that I saw – presented first hand by the mighty Huon Pines of  Tasmania.

If you’re really interested in the subject, then you might even be interested in attending the second Asian Dendrochronology Conference in Xian, China in August 2011! And I’ve just heard that the next major international conference “World Dendro 2014″, will be held in Melbourne, with several excursions and field studies planned for Tasmania.

beware reality television politics

 “Never underestimate the intelligence of the electorate” has become a throw-away line in Australian politics. A more relevant mantra for the next election might be, “never underestimate the desire of the electorate for authenticity and leadership”.

In this era of poll driven politics, there is a growing concern from informed Australians about decision makers in the Parliament seeking populist solutions. There seems to be less appetite from those in power to form policy based on principles, on sound analysis and with longer time horizons. The balance between consultation and leadership has swung to consultation as those at the helm (I hesitate to use the term leaders), fear being voted off in today’s reality television politics.

Why should this worry politicians? Voters are changing as society norms change and as awareness and knowledge grow at an alarming rate. Voters who decide elections (as opposed to those locked into their fixed loyalties, beliefs and prejudices) have never been better informed. They are also looking for meaning and authenticity – as they are in their work and personal lives. Their bullshit detectors have never been more finely tuned. They are increasingly intolerant of political opportunism and of leaders who play the man rather than the ball.

Polls and surveys reflect opinions about the known world at a point in time. They don’t measure responses to a different world, one which can be created when a leader takes a stand on a clearly articulated principle. For example, Julia Gillard appears to have lost an opportunity to tap into the latent values of an informed electorate on the complex asylum seeker issue.  A more humanitarian line on asylum seekers, is a potential election winner. Courageous leadership and clear communication around the context and principles used in reaching such a position, has the potential to actually change attitudes – and as a result the polls. Espoused views can and will shift as people are given permission to allow their better understanding and desire for authenticity, to be expressed.

Another sleeper is climate change. We saw the exodus of swinging voters to the Greens as the Government dropped the ball on their previously expressed principles. I have written previously about the Moderate Green Majority, environmentally conscious Australians who are waiting for clearly communicated logic and policies to follow leadership – leadership based on issues and outcomes, rather than on responses to polls in their known world.

Have we seen the last of courageous leaders like Jeff Kennett and Paul Keating? Is considered decision making and vision being eroded by reality television politics and polls? Both of the major parties are being seduced by populism and are missing the opportunity to win respect and votes through courage and true leadership. If they fail to see the light, watch out for the emergence of a powerful third force that provides principle, freshness and authenticity, in much the way that Nick McKim has achieved in Tasmania.