Zali Steggall (Warringah, Independent) Share this | Hansard source

I move:

That this bill be now read a second time.

This bill, the Climate Change (National Framework for Adaptation and Mitigation) (Consequential and Transitional Provisions) Bill 2021, will make consequential and transitional amendments to existing acts for the purposes of the substantive bill, the Climate Change (National Framework for Adaptation and Mitigation) Bill 2021. This bill also introduces climate risk disclosure for Commonwealth entities. Commonwealth entities like government agencies and departments are exposed to the risks of climate change impacts. The Reserve Bank of Australia has observed that climate change is exposing financial institutions and the financial system more broadly to risks that will rise over time if not addressed.

Since 2017, the Task Force on Climate-related Financial Disclosures, TCFD, led by Michael Bloomberg, has been leading voluntary climate reporting standardisation for private companies. Companies around the world have recognised the value of climate disclosure. Benefits include more effective risk assessment, capital allocation and strategic planning. Banks, insurers, developers, miners and big business around the world have been rapidly incorporating climate disclosure in their annual reporting. After a landmark opinion by Noel Hutley SC and Sebastian Hartford Davies, legal cases like McVeigh v Retail Employees Superannuation Pty Ltd and guidance on climate risk from the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority, Australian companies must start disclosing material climate risks or be exposed to legal and regulatory actions. According to APRA:

A listed entity should disclose whether it has any material exposure to environmental or social risks and, if it does, how it manages or intends to manage those risks.

Fifty-eight per cent of ASX 100 companies now report using TCFD—up from 16 per cent in 2017. More work needs to be done, but progress is being made very rapidly in the private sector. Unfortunately, the public sector is lagging far behind.

How can we ask companies to report on climate risk but not Commonwealth entities? A legal action last year claiming that the government is not disclosing climate risks on Treasury bonds demonstrates this. National governments have been successfully prosecuted in Ireland and the Netherlands for failing to adequately respond to climate related risks. Moreover, countries are dumping Australian Treasury bonds over a perceived lack of action and transparency. This is a looming credit risk. The Treasurer himself stood up in front of the Australian Industry Group and detailed the consequences of our inaction. These are: higher lending costs, a burden on Australian households and investment skipping Australia as a destination.

Other governments are now leading the charge. On 20 May of this year, the United States' President Biden signed an executive order on climate related financial risk. President Biden mandated that the US federal government would advance consistent, clear, intelligible, comparable and accurate disclosure of climate related financial risk, including both physical and transitional risks. The Australian federal government is exposed and should do the same.

This bill will ensure that accountable authorities for Commonwealth entities must consider, in the exercising of their duties or powers, the potential risks of climate change, the potential contribution to Australia's emissions of greenhouse gases, and the broader impacts of these actions. This bill will also establish the reporting of material risks to those entities and the disclosure of actions taken to mitigate those risks. Stakeholders, including the community, will have confidence that the government is managing its own climate risk. The minister for climate change can publish guidelines for accountable authorities to follow in their response to climate risks. These guidelines will be made by legislative instrument to ensure accountability.

The bill enables the creation of a climate change commission and the repeal of the Climate Change Authority. We know that a climate change commission is needed to provide expert, fact based, independent advice to policymakers. Only then can we really make sure that climate policy is made in the national interest for the benefit of all Australians, instead of what we are currently seeing, which is policy on the run being dictated by a minority of Nationals, their hands out, looking to negotiate something that is not in the best interests of Australia. We will get a confused mess of policies that do not efficiently and cost-effectively address climate impacts, adaptation, mitigation and our transition across all sectors of society. We've heard all about a deal around things like inland rail that does nothing to stop climate change, that will further facilitate transportation of thermal coal. We've heard of carve outs from agriculture, which stands to be the area most affected by climate change yet stands to gain the most. We cannot have political deals dictating our long-term safety and our long-term prosperity. We need independent advice to ensure accountability.

We know that the UK Climate Change Committee, on which this commission is based, has been effective at breaking political deadlock—the kind of deadlock that the government is in at the moment with its lack of climate policy. It cuts through debate with sound and practical advice and puts forward exemplar policy that is usually accepted by the government of the day and the opposition. We must emulate that in Australia. Introducing the Climate Change Commission is desperately needed in Australian politics. It will introduce duties and reporting requirements on accountable authorities and Commonwealth entities. We need to pass both the climate change bills and this bill. It is very clear that the government has not done the work. But the work is done. The community is behind this—industry, business—all are behind it. It's time to put a winning plan to Australia and to the world. I cede the rest of my time to the member for Indi.

See this speech in context