AFR Energy & Climate Summit 2024: Sandra James Opening Remarks

Deloitte has been the major sponsoring partner of this summit for several years.  Over this time, we have seen a seismic shift in our industry’s landscape as policymakers, industry, investors, communities, and customers have embraced the energy transition.

Deloitte firmly believes that the Australian economy is incredibly well-placed to benefit from the energy transition through a combination of our abundant critical and natural resources and a transformed workforce.

Our All Systems Go: Powering Ahead report, produced in partnership with NAB, is a call to action for Australia to decarbonise quickly, by investing in low emissions technology and industries now. If we do, then Australia can secure an estimated $435 billion opportunity from competitively trading in global decarbonisation by 2050.

But setting up our domestic industries for green success and capturing the global opportunity requires us to move forward at pace.  

The truth is, as we stand right now, the persistence of barriers in our regulatory frameworks and supply chains, skills shortages, the pace of grid transformation, and an uncertain economic environment – could flip the narrative from growth and economic prosperity, to one of cost and delay.

While it is of course crucial that major energy projects have the appropriate legal, environmental, and social licences to operate, a recent study from Western Sydney University found that renewable energy projects in Australia had lead times of between 40–50 months.

The energy transition is often compared to an industrial revolution. To put the associated challenge into context, the First Industrial Revolution timeline spanned 80 years. We have given ourselves 30 years to achieve our 2050 net-zero goal. The scale and pace required is unprecedented.

Put another way, all the projects necessary to Australia hitting its 2030 climate goals must get underway within the next year if they are to be operational in time. If we want to do more than the bare minimum and really capture the economic upside of the transition, we need to get investment flowing fast.

We must be willing to experiment with new frameworks, processes, and technologies, embracing digitisation and data-enabled tools. And we must meet every challenge with a mindset of collaboration – collaboration between all levels of government, industry, regulators, our communities, and customers.

While deploying capital faster will create additional economic and commercial value, we must look to reinvest a portion of this value in shared prosperity with communities.  Social licence is critical to the timely investment and the delivery of an affordable and more resilient energy system for those who our sector ultimately serve.

To realise the full potential of the transition, companies need to be prepared to lean across boardroom and executive tables and embrace both the opportunity created and the responsibility that comes with it.

From January 1 next year, Australia’s mandatory climate reporting regime will come into effect for our largest organisations, with smaller ones to be phased in over the next two years. To paraphrase ASIC chair Joe Longo, the introduction of this mandatory climate-related disclosure represents the biggest change to corporate reporting in a generation.

This change brings incredible opportunities, and risks, for business. Through sustainability reporting and tracking progress towards climate targets, businesses have the potential to win new customers through improved brand reputation, to attract funds from increasingly ESG-conscious institutional investors, and open new markets and opportunities through improved relationships with governments.

On the flip side, falling foul of these new reporting requirements could see directors accused of breaching their duties. To realise the full potential of this change to the norm, companies need to be prepared for a colossal shift in corporate governance.

As I have said on this stage before, we need more than optimism. We need certainty. Certainty will inspire optimism, confidence, collaboration.

The optimism to move beyond planning. The confidence to ensure we act. The collaboration to ensure we act in a way that serves more than our individual interests.

As we debate these constraints and opportunities, let’s acknowledge and embrace that this is not an ‘I’ problem to resolve…this is well and truly a ‘we’ problem.

So, let’s be confident. Let’s be bold. Let’s all challenge ourselves on our collective responsibility to realising what is an extraordinary opportunity for Australia.