AFR Energy & Climate Summit – Opening Address

I was asked to become the CEO of Deloitte five months ago.  And one of the first things you do as a new CEO is listen.  And I have had the privilege over the past few months to talk to many business and government leaders about their strategic issues and priorities.

Predictably, the number one topic has been COVID and what we need to do to reopen our country again as quickly, effectively and safely as possible.  Another key topic has been digital transformation and what we need to do to digitise our organisations, to digitise the way we engage with our customers and our employees. 

But what has surprised me the most, and has elicited the most energy and passion from the leaders I have spoken with, is the topic of climate.  Climate action is rapidly emerging as one of the most important strategic considerations for Australian leaders today. 

So why do we need to do something here in Australia?  I have heard the sentiment a lot that what we do doesn’t really matter, the focus should be on the heaviest emitting nations like the US, China, and India.  I would make three points in response to that argument:

Firstly, Australia is disproportionately impacted by climate change and these effects are already being seen in multiple areas.  We’re impacted by harsher heatwaves and droughts, by more prevalent and punishing bush fires, by more severe storms, cyclones and floods and by rising sea levels.    

Secondly, if we’re disproportionately impacted, we want and need to have a disproportionate influence on the global climate agenda.  And for this to be true, we first of all need to be globally credible in terms of our targets, our investments and our actions.  And, while we have made some progress, we still have work to do to be truly credible on the global stage.

And thirdly, and in many ways most importantly, investing and leading in climate action is a huge opportunity for this country.  We have plenty of land, and access to lots of sun, wind, resources and sea water.  We situated close to Asia.  We have a skilled workforce.  We have all the right ingredients be a powerhouse in the production and export of renewable and clean energy.  If we are bold and focused, we have the opportunity to attract investment, create new jobs, and support regional and indigenous communities.This is an opportunity we should seize.

So what do we need to do to take action, to be credible, and to realize this opportunity?

Three thoughts:
First we need to set bold and aspirational targets for carbon reduction and energy transition, backed by practical strategies.  Investment, innovation and action doesn’t just happen, it needs be shaped, driven and encouraged.  And a key way to catalyse meaningful action is by putting a stake in the ground with concrete goals, targets and priorities.

At Deloitte we have a global aspiration to be net zero by 2030.  It’s a worthy goal, but in my view not bold enough.  In Australia, we have set our target to be net zero by 2025 in terms of our scope 1,2 and 3 emissions.  This is not about virtue signalling.  It’s about setting tough but achievable targets to drive real action.  This move has forced us to confront our travel and real estate carbon footprints, to reconsider how we work and engage with each other and our clients, and to better understand, influence and offset our upstream and downstream emissions.

It has shown me that climate action is a complex and transformative agenda and reinforced the importance of having clear and aligned targets and actions.  And frankly, as leaders, we need to be bold and pro-active so that we can shape our own destiny and not have our agenda dictated to by others.

Second, we need to work as a connected ecosystem if we are to effectively tackle climate change.  It is apparent that none of us can do this alone.  We need to compete and drive our own agendas.  But we also need to work in a coordinated way across business and government, across industry sectors, across supply chains if we are to transition to net zero and maximise the opportunity for our country. 

It’s not going to be easy, but I am really encouraged by the willingness of leaders to share ideas and best practices, to work together on policies and issues, and to explore joint programs and investments.  We have a genuine ‘Team Australia’ moment here and we should embrace this opportunity to work together to make a difference.

And finally, we need to actively encourage, stimulate and drive climate technology innovation.  We have an opportunity to lead the world in renewable energy and in providing the minerals needed to drive global decarbonisation.  But we should also set ourselves a goal to be global leaders in hydrogen production, in carbon capture, in clean mining, agriculture, construction and transportation. 

I come from an engineering and technology background and know that innovation doesn’t just happen.  We need the right policy, investment and industry settings, the right incentives, the right skills programs, and the right goals and targets.  And, while we gave solar panels to the world, we need to acknowledge that we are not a leading innovator today. 

When I analyse exchange-traded funds focused on climate and clean energy technology, I see stocks from all around the world with countries like the US, China, Germany and Denmark leading the way.  It is very difficult to find a single Australian company in any of these share portfolios.  That’s not good enough and we need to pro-actively unlock commercially relevant, world leading Australian innovation over the years ahead.

So in conclusion - it’s clear that climate is an increasingly important issue for our nation and all of us in leadership roles.  It’s time for us to collectively move from thought to action, from why to how, from issue to opportunity.  We need to step up, be prepared to lead and to work together to drive innovative and impactful action and solutions for the future of our country.