A quiet evolution is underway in association board rooms around Australia. An increasing number of associations are recognising the impacts of climate change, and the challenges and opportunities for their members in reducing emissions and risks. Some are being pushed by their members, some by member splinter groups, and others informed by competitors or warnings and dramatic impacts and costs for their sectors.
A combination of factors is driving this change in associations. They include:
- unambiguous calls from prudential authorities like the Australian Securities and Investment Commission (ASIC) and Reserve Bank for company boards to report on their climate and emission risks,
- calls from influential peak business associations for energy and climate policies aligned to Paris targets, and
- unprecedented events such as record-breaking fires, droughts, floods and coastal erosion disrupting member businesses, communities, supply chains, property, production and confidence in the future.
“Putting Australia on the path to net zero emissions by 2050 can be an opportunity to drive billions of dollars of new investment.”
Jennifer Westacott, Chief Executive Officer, Business Council of Australia (BCA)
Proactive, or just reactive?
Many Associations like BCA and their sectors are subject to environmental regulatory measures. Valued associations frequently engage in policy development with members and governments and help members achieve compliance and improve performance. However, simply reacting to regulatory measures isn’t enough; an effective association is a proactive one.
Many associations are proactive in regulatory affairs, especially concerning occupational health and safety matters. All Australian associations, large and small, now need to be proactive in addressing climate change too.
The challenge is that climate change thwarts many predictable ‘business as usual’ policies, operations and processes. It is a new and a volatile ‘normal’. It is complex, all encompassing, and its impacts of floods, fires, storms and droughts can be devastating.
Associations are having to consider implications for their strategic plans, services, budgets, infrastructure and financial assets, and their members. They must also be forecasting and assessing risks for their members and sector in the immediate and longer term.
Responsibility and leadership
Across sectors, a growing number of individual businesses and professionals are taking action on climate change and reducing emissions; they recognise it is both a competitive advantage and necessary risk management measure. From large companies like BHP exiting coal (Aug 2020), to Tibaldi manufacturers installing renewables and public housing making investments in insulation and energy efficiency.
We know that each individual person taking responsibility and action collectively makes a difference. This equally applies to individual companies and professionals. The advantage of associations is the flow-on leadership effect and their vast stakeholder network. Active associations engage and influence their members, their wider industry, governments and sector audiences/customers. Associations can take easy steps like identifying the leaders within their own sectors, the trends and basic actions to start integrating into member programs.
Director duties
In case you missed it, in 2016 and again in 2019 the Centre for Policy Development explored climate risks in terms of company directors’ duties.
The centrepiece of this work was a ground-breaking legal opinion on directors’ duties and climate risk commissioned by CPD in partnership with the Future Business Council. The opinion found that company directors who ignore or mismanage climate-related risks could be held personally liable for breaching their legal duties under the Corporations Act.
This not only applies to ASX listed companies. Given the increased scrutiny, campaigns and trends, if your association has not yet informed your board and members of this explicit risks to directors, do so now.
Association solution series
Associations are a vital part of our society and economy. They are the link between individual companies/professionals, governments and their communities. Some already have good climate positive programs in place.
Through this online platform we will celebrate leaders, inform key steps and opportunities for integration and action to assist associations fulfill responsibilities to their members – to be ready for the present and future.
With a long history both working in associations and on boards, I know that associations are essential and part of the solution for their sectors and for Australia. In this series of forthcoming articles I will be setting out steps associations can and should take to succeed.
