Finance Finance News Hayne lambasts Coalition attitude on climate change, urges businesses to act

Hayne lambasts Coalition attitude on climate change, urges businesses to act

Hayne speaks.
Kenneth Hayne has said business leaders have a legal duty to act on climate change. Photo:AAP
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Former royal commissioner Kenneth Hayne has warned business leaders they are legally obliged to act on climate change and cannot hide behind the government’s “short-termism”.

In a private address to think thank, the Centre for Policy Development, Mr Hayne last month told business leaders, regulators and government officials that companies were legally obliged to act on climate change, as it fell within their ‘best interests duty’.

Mr Hayne said this required businesses to act in the best interests of society as a whole, rather than solely in the interests of shareholders, as increasing climate risk meant the two were converging.

He said this interpretation was supported by international law and Australian regulation.

But, in a thinly veiled attack on the Morrison government, he said “learned helplessness” and “entrenched short-termism” in Australia’s political discourse had discouraged business directors from taking action.

“A response often seen in Australian political discourse is that, ‘the issue is large; Australia is comparatively small; nothing we do will affect the outcome if the big emitters do not act’. That is, the response is, ‘we can do nothing that will help’,” Mr Hayne said.

“By making that response, we are persuading ourselves that we are helpless.”

Mr Hayne said politicians had framed the climate debate as a choice between a strong economy and healthy environment – a false dichotomy that “fits comfortably with those who still see climate change as a matter of belief or ideology”.

“Framing the most recent debates provoked by the bushfire emergencies as part of the ‘culture wars’ reinforces the notion that climate science is a matter of belief, not scientific observation and extrapolation,” Mr Hayne said.

“No less importantly, because the debate remains framed as a debate about belief, learned helplessness and short‑termism can be translated into the nativist‑populist terms that now have such currency in many political systems.”

Despite these two influences on Australia’s national climate debate, Mr Hayne said boards needed to recognise the nature and extent of climate-related risks; develop strategic plans in response; and report to shareholders and the wider market “about what they have done, are doing and will do in response”.

“Boards simply cannot confine their attention to the short-term,” he said.

“Entities which did not look beyond short‑term profit have recently suffered very large financial and non‑financial losses.”

Mr Hayne’s comments come as “unprecedented” bushfires rage across NSW and Queensland, with at least 2.2 million hectares burned or currently burning across the two states.

Despite the catastrophic conditions, the Morrison government has insisted that now is not the time to talk about climate change.

Nationals leader Michael McCormack described environmental activists as “raving inner-city lunatics” when they attempted to discuss climate policy in November.

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