ESG Snapshot: Issue 54

This week's highlights include:

• Reshuffle. Changes at the ministerial and assistant minister level will result in new oversight arrangements for several climate and sustainability matters.
• Huge carbon pricing differences. Company internal carbon prices range from as low as $12.90 to as high as $224, says a new ASX200 study.
• Repair bill. Depending on how carbon markets are used, it will cost between $6.2 billion and $7.3 billion annually to restore Australian landscapes, says a major new blueprint for action.
• ASX environmental futures. The ASX today launched futures contracts for carbon credits and renewable energy certificates.
• Grid map. VicGrid has released a renewable energy zone study area map, that will inform the development of a new Victorian transmission plan.
• Heat pump plan. With support from two state governments, the Energy Efficiency Council has released a new roadmap for heat pumps.
• Land clearing. New Queensland data shows more than 323,600 hectares of forest and bushland were cleared between 2021-22, prompting calls for better enforcement and new anti-clearing incentives.
• Class action fails. The health evidence is not sufficient for a class action over the health effects of glyphosate to succeed, the Federal Court has ruled.

ESG Snapshot - powered by the Business Council for Sustainable Development Australia and curated by Earthed.

A Cabinet reshuffle has resulted in several changes for portfolios that involve a strong focus on climate and sustainability matters.

At the ministerial level, Murray Watt will move out of agriculture, and Julie Collins will take on responsibility for agriculture, with Murray Watt moving to employment and industrial relations.

Senator Jenny McAllister will be elevated from the role of assistant climate change minister, and will become Minister for Cities and Emergency Management - a portfolio in which climate change and sustainability will still be crucial issues.

At the assistant minister level, Josh Wilson is the new assistant minister for climate change and energy.

Senator Tim Ayres is the new assistant minister for a Future Made in Australia, while continuing to serve as assistant minister on trade. Senator Anthony Chisholm now has assistant ministerial responsibilities for agriculture, fisheries and forestry, and will continue to serve as assistant minister on regional development.

The ASX has launched three Environmental Futures contracts covering Australian Carbon Credit Units (ACCUs), Large-scale Generation Certificates (LGCs), and New Zealand carbon units (NZUs).

The contracts, which build on existing ASX futures contracts for electricity, gas and grains, are hedging instruments that help customers to price and manage the risk of the energy transition, up to five years ahead.

The ASX has released an information sheet and FAQs on the new contracts.

A new report from the Australian Council of Superannuation Investors (ACSI) has found a growing number of ASX200 companies are integrating climate considerations into their financial statements and pricing carbon to test business resilience.

In total, 131 ASX200 companies (66%) have made a net zero commitment, an 8% increase on 2023. A total of 82% of the market capitalisation of the ASX200, representing approximately $2.2 trillion, is invested in companies that have set net zero ambitions.

The report found 21% of the ASX200 disclosed that they use an internal carbon price when making investment and capital decisions – consistent with the previous year. However, the prices used vary significantly, as does the way in which they use them.

Of those revealing the prices that they use, the lowest was $12.90 per tonne, and the second highest being NZD$250 (A$224.77) per tonne.

The report also found:

• 29% of the ASX200 disclosed how climate change is considered when evaluating their financial performance and position.
• 66% analysed and disclosed their exposure to physical risks arising from climate change – a significant rise on the previous year.
• 29% have set Scope 3 targets.
• 30% say their targets are science-based.
• There is a dearth of reporting on carbon credits use, holdings and quality, with disclosures varying significantly.

The Wentworth Group of Concerned Scientists has released a 30-year Blueprint to repair Australia's landscapes, that proposes 24 actions and investments.

The report, which was developed in consultation with more than 60 experts over six years, says these actions will require the investment of about $7.3 billion annually.

However, restoring and protecting native vegetation through Australia's ACCU scheme could provide between 7% and 15% of the total investment required, reducing the annual finance gap to between $6.2 billion and $6.8 billion, it says.

Submissions to the Senate committee inquiry into the government's nature positive bills are now available.

Meanwhile, organisations including the Biodiversity Council, the Wentworth Group of Concerned Scientists, the Clean Energy Council and the Smart Energy Council appeared before an inquiry hearing held last Friday.

The federal government has advised the Northern Territory government that the Jabiluka Mineral Lease should not be renewed - a move that means uranium mining in the area will not go ahead.

Instead, and in line with the wishes of the Mirrar Traditional Owners, the site will be added to Kakadu National Park.

Court ruling - glyphosate. A class action against Huntsman Chemicals has failed, with the Federal Court's Justice Michael Lee ruling that it is not proven on the balance of probabilities that Monsanto's glyphosate herbicide, marketed as Roundup, led to an increase in the risk of developing non-Hodgkin lymphoma.

Updates on the EPBC Public Portal show a final recommendation report has been completed for the Australian-Asia Power Link has been completed, though no documentation is available. A final referral decision has yet to be made.

Similarly a final recommendation report has been completed for the NSW Central-West Orana REZ transmission project, with no documentation or decision yet available.

Round two of the Energy Efficiency Grants for Small and Medium Sized Enterprises Program has awarded grants totalling $41.2 million to more than 1,700 small and medium businesses.

CSIRO has released a report assessing Australia's mid-stream processing capacity for critical minerals. It has also released detailed, supplementary reports for lithium, cobalt, graphite, rare earths, silicon, and lithium-ion battery recycling.

The Australian Academy for Technological Sciences and Engineering has released a report on small modular reactors, which concluded it is unlikely that they could be part of Australia's energy mix until they reach market maturity, in the mid- to late-2040s.

A House of Representatives committee inquiry into electric vehicles held hearings last Thursday and Friday, with another hearing scheduled for 8 August.

AEMO has published its June connections scorecard for the National Electricity Market, tracking the progress of generation and storage project applications to connect to the NEM.

Compared to the previous 12 months, the capacity of projects working through the connection process have surged from 30 GW to 43 GW, the scorecard shows.

The Australian Accounting Standards Board has released an action alert from its most recent meetings, which outlines its decisions on climate-related financial disclosures.

Inefficient halogen lights will be phased out, if LED equivalents are available, under changes to the Greenhouse and Energy Minimum Standards (GEMS) scheme.

With the support of the NSW and Victorian governments, the Energy Efficiency Council has released a Roadmap for heat pump water systems in Australia, along with a background report.

The roadmap's 17 recommended actions include revising standards, and putting in place end-of-life stewardship measures.

In the last 12 months, the uptake of domestic heat pumps in NSW and Victoria has been significant, with more than 104,000 installed across both states, driven by the Victorian Solar Homes Program and the NSW Energy Savings Scheme. 

The two state governments will establish a consultation group of industry representatives to support and oversee the development of systems and standards.

Alinta and Parkwind have made an EPBC referral for the proposed 1GW+ Spinifex offshore wind farm off the coast of Portland, doing so a week after Macquarie Green Investment Group lodged a referral for the Great Eastern offshore wind project.

The Northern Australia Infrastructure Facility (NAIF) has reached a significant investment milestone, with $2 billion invested in infrastructure projects across northern Australia.

Last year the federal government committed an additional $2 billion to the Facility, taking the total financing available to $7 billion, and earlier this year the government updated NAIF's investment mandate.

The federal government says it is finalising 10 carbon capture and storage exploration permits, and several gas exploration permits.

The Infrastructure Sustainability Council has appointed Toby Kent as its new chief executive.

Kent was most recently a partner in the PwC energy transition team, and was previously the City of Melbourne's chief resilience officer. He is also a board member of the Business Council for Sustainable Development Australia.

EY has released a new briefing paper on How Australia can fast-track energy transmission projects.

The Australian Institute of Management is now offering short courses on ESG, and on sustainability leadership.

The state government has released the latest annual Statewide Landcover and Trees Study (SLATS) for August 2023 to August 2022.

The extent of clearing revealed in the latest study was criticised by Ken Henry, chair of the Australian Climate and Biodiversity Foundation.

The study shows more than 323,600 hectares of forest and bushland were cut down and cleared between 2021-22, including almost 12,500 hectares of endangered or threatened regional ecosystems, Henry said.

Henry said the study showed the need for stronger measures to ensure compliance with vegetation protection laws and for new and improved policies to reduce the clearing of native vegetation.

Henry also welcomed the Queensland government's proposal to develop an ACCU scheme method that would reward landholders with carbon credits for avoiding reclearing on previously cleared land.

Sixteen local organisations have received Natural Resource Recovery Program grants totalling $23.7 million for projects that improve soils and land management practices, and build up native vegetation.

Open consultations

• Reef water quality. The state government is conducting a survey for its review of the Reef 2050 Water Quality Improvement Plan, with responses due by 30 September.

The state government has recruited 11 new Natural Capital Advisors, who will advise farmers and land managers on the environmental and financial opportunities available to them.

Following the new appointments, NSW Local Land Services will be hosting Natural Capital Conversation events in August and September to provide landholders with information on how they can manage their natural assets.

The state government has awarded Business Food Waste Partnership grants totalling $1.6 million. It has also awarded another $3 million to charities and community organisations to rescue more surplus or donated food.

Consultation opportunity - renewable and the grid. VicGrid has released draft Victorian transmission plan guidelines and a renewable energy zone study area map. The final guidelines will be published in September, as a prelude to finalising the state's first transmission plan by July next year.

Comments on the draft guidelines are due by 25 August.

The state government's Scientific Advisory Committee, operating under the auspices of the Flora and Fauna Guarantee Act, has made a final recommendation to support the nomination of salvage logging of burnt native forests as a potentially threatening process under the Act.

Sustainability Victoria has released a case study on a new high friction surface treatment product for roads that incorporates a high proportion of recycled, crushed glass.

LGA South Australia and the EPA have extended their partnership agreement through to 2026.

Under the terms of the agreement, the two entities will continue to work collaboratively for better environmental outcomes.

The federal and WA governments have signed a Renewable Energy Transformation Agreement, with the federal government agreeing to underwrite the construction of 6.5 terawatt hours of new wind and solar projects in WA, as well as 1.1GW of new storage.

Meanwhile, registrations opened last week for the first Capacity Investment Scheme (CIS) tender for Western Australia.

The state government has appointed environmental scientist Eve Drain as the state's new Appeals Convenor.

Eve Drain previously led the environmental approvals team at BHP Iron Ore. 

The federal and NT governments have signed a $250 million agreement as part of the Rewiring the Nation Program, to be delivered through the Clean Energy Finance Corporation.

On 22 July, the world experienced its hottest day since at least 1940, according to the EU's Copernicus Climate Change Service.

The European Commission has published revised guidance on the EU Carbon Capture and Storage Directive.

The UN Food and Agriculture Organisation has launched a new report titled State of the world's forests 2024, which concludes that recent data indicate a significant reduction in deforestation in some countries.

For example, deforestation is estimated to have declined by 8.4% in Indonesia in 2021–2022, and the rate of gross global mangrove loss decreased by 23% between 2000–2010 and 2010–2020.

However, climate change is making forests more vulnerable to stressors such as wildfire and pests, the report says.

InfluenceMap has issued a new briefing on industry groups and lobbying against the US SEC climate disclosure rule.

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