(AU AFR) ASIC Targets Fossil Fuel Companies Over Climate Change

 AFR - Michael Roddan

A $700 million oil and gas exploration group chaired by Future Fund guardian John Poynton and National COVID-19 Commission boss Nev Power was one of five fossil fuel firms warned by the corporate regulator they risked breaking the law because of non-disclosure of climate change risks.

The intervention by the Australian Securities and Investments Commission in mid-2020 was among the regulator’s first forays into the market as it ramps up its regulation of climate-related disclosures for shareholders.

National COVID-19 Commission chairman Nev Power is the deputy chairman of Strike Energy.  Alex Ellinghausen

Letters sent to companies, obtained under Freedom of Information laws, reveal ASIC fired off the missives to Strike Energy and its auditor Deloitte, the $400 million Carnarvon Petroleum and EY, Africa-focused Pancontinental Oil & Gas, Perth-based Whitebark Energy and KPMG, and the $200 million Leigh Creek Energy and auditor Grant Thornton.

The warnings were all triggered by complaints received by ASIC that alleged the companies’ operating reviews and directors’ reports failed to disclose risks posed to the businesses by climate change. While auditors do not audit directors’ reports in the annual reports, they are required to ensure any information in a director’s report is consistent with the audited operating and financial review.

Top lawyers say company directors could be liable for failing to understand and disclose climate risks, could be sued for failing to act on those risks once known, and may be liable for “misleading or deceptive conduct” for selectively disclosing exposures to climate change or declaring green goals while lacking credible plans to achieve them.

The arguments have gained the backing of the Reserve Bank of Australia, ASIC, the Australian Prudential Regulation Authority, the ASX corporate governance committee and the Australian Accounting Standards Board. The Taskforce on Climate-related Financial Disclosures (TCFD) is now seen as the global standard for informing shareholders of the climate-related risks faced by companies.

ASIC issued lengthy a guidance for companies in 2018 and considers it potentially misleading conduct to discuss a company’s prospects without also referring to potential downside risks.

In his letters, ASIC senior manager Ben Phillips warned Strike Energy, Carnarvon Petroleum, Pancontinental, Whitebark and Leigh Creek that the companies’ 2019 annual reports were “inconsistent and out of step” with other energy companies “without any clearly discernible explanation as to why this might be the case”.

The Taskforce on Climate-related Financial Disclosures is now seen as the global standard for notifying shareholders of the climate-related risks faced by companies. AP

Mr Phillips said that while ASIC had not conducted a “detailed review” of the non-disclosures in question, it nonetheless reminded the directors and auditors of the requirements under section 299A of the Corporations Act, which requires full disclosure, and warned it would be monitoring disclosures in 2020 annual reports.

Mr Poynton’s 2019 annual report for Strike made no mention of climate change or the risk posed by fossil fuel transitions, but his chairman’s letter noted that: “Strike sees the role of gas in the energy system increasing in importance as an immediate and effective way of reducing Australia’s carbon intensity.”

After ASIC’s intervention, Strike’s 2020 disclosures noted the “potential risks and opportunities posed to our business, and the broader sector, as a result of climate change and the anticipated global transition towards a lower carbon economy”, and disclosed the board was considering using the TCFD disclosure template in future periods.

Strike managing director Stuart Nicholls told The Australian Financial Review the company would recommend to a new ESG (environmental, social and governance)-related board sub-committee, chaired by Mary Hackett and including Mr Power, that TCFD be adopted for this year’s annual report.

An oil rig owned by Carnarvon Petroleum. Supplied

The company in May announced a commitment to reach net zero emissions by 2030, while planning to fully offset its Scope 3 emissions (from its energy customers) with a development of a geothermal project that could supply low-cost, zero-carbon energy into WA for more than 50 years.

“These things are being taken very seriously at Strike,” Mr Nicholls said.

Mr Nicholls said ASIC was doing its job ensuring good governance and disclosure, and that in the absence of a market mechanism or policy framework from the federal government for carbon pricing, capital markets and corporations were now adopting more rigorous standards. “There is value in adapting,” he said.

In a speech in February this year, ASIC commissioner Cathie Armour noted that the regulator had written to “several companies that had come to our attention as potential ‘laggards’ in this area to remind them of their statutory obligations”.

Carnarvon Petroleum, which did not mention climate change in its 2019 annual report apart from noting the company was “cognisant of the need to achieve an appropriate balance, over time, in relation to ... the environment, social licence and corporate governance”, produced its first sustainability report in October 2020 after receiving the ASIC correspondence.

A spokesman for Carnarvon said the company had also aligned its climate change-related disclosures with the TCFD model. “We have also made a deliberate move to create a new stream of reporting on our commercial and operational risk register, enhancing the focus on ‘climate risk’ in mid-2020,” the company said.

Carnarvon’s 2020 annual report noted climate change might affect oil and gas markets, more extreme weather events could affect its operations, while government policy may have an “adverse impact” on the business.

Pancontinental Oil & Gas, which did not mention climate change in its 2019 annual report, did not respond to questions, but its subsequent annual report noted “the developing interest of our stakeholders in climate change and the potential risks that may arise”, and disclosed it would use the TCFD model in the future.

“Going forward it will be important for climate change risk to be considered in all business decisions particularly during the due diligence stages of new ventures,” Pancontinental’s latest annual report said.

Whitebark Energy, which omitted any reference to climate change in its 2019 annual report, warned investors in its subsequent report that climate change risks included the “transition to a low carbon economy” and policy changes that “may result in increasing regulation and costs which could have a material impact on the company’s operations”.

Leigh Creek Energy also did not mention climate change in its 2019 report, but in its 2020 annual report told investors it would “act to reduce our emissions in all areas of our operations”, pursue new technologies to minimise its impact on the climate and “work towards our objective of becoming carbon neutral by 2030″.

Links

• ASIC - Climate Change
• 13 fossil fuel companies named in climate risk complaint
• Fossil fuel gaslighting: accept climate change but undermine action
• ASIC issues updated guidance for directors seeking to avoid climate lawsuits
• Climate-related risk a key director responsibility: ASIC
• Rising heat in the Boardroom: Directors’ duties in the face of climate risks
• International Energy Agency warns against new fossil fuel projects. Guess what Australia did next?

(UK St Andrews Uni) Earth's History Sends Climate Warning

University of St Andrews

Chemical fingerprints of past CO2 levels are preserved in microscopic fossil shells such as this foraminifera. Credit: University of St Andrews

A new study of historical carbon dioxide levels stresses urgent action is needed to avoid prehistoric levels of climate change.

The international team of scientists, led by the University of St Andrews, collected data spanning the last 66 million years to provide new insights into the kinds of climates we can ultimately expect if CO₂ levels continue to rise at the current rate.

The projected rise would result in prehistoric levels of warmth that have never been experienced by humans.

The study, published in the scientific journal Annual Review of Earth and Planetary Sciences (Monday 31 May 2021) provides the most complete history to date of how CO₂ has changed over the last 66 million years, the time since dinosaurs last roamed the planet. The data collected shows more clearly than ever before the link between CO₂ and climate.

Working with colleagues from Texas A&M University, the University of Southampton and the Swiss University ETH Zürich, the international team pulled together data collected over the last 15 years using high-tech laboratory techniques.

Samples were taken from cores of mud from the deep-sea floor, where microscopic fossils and ancient molecules accumulate, preserving a story of what CO₂ and the climate looked like at the time.

By firing these ancient atoms through super sensitive instruments, scientists can detect the chemical fingerprints of past changes in CO₂, which can be compared with present day changes. For example, the study explains, through fossil fuel burning and deforestation, how humans have now driven CO₂ back to levels not seen since around three million years ago.


The history of atmospheric CO2 levels and global average temperature over the last 60 million years: the CO2 scale shows CO2 in terms of doublings, as this is the key control on climate. Credit: University of St Andrews.

Dr. James Rae, from the University of St Andrews School of Earth and Environmental Sciences, who led the international team explained: "For instance, the last time CO₂ was as high as it is today enough ice melted to raise sea level by 20 metres and it was warm enough for beech trees to grow on Antarctica.

"If we allow fossil fuel burning to continue to grow, our grandchildren may experience CO₂ levels that haven't been seen on Earth for around 50 million years, a time when crocodiles roamed the Arctic."

Dr. Rae added: "CO₂ has transformed the face of our planet before, and unless we cut emissions as quickly as possible, it will do it again."

At COP26 in Glasgow this November, politicians will work on international agreements to lower CO₂ emissions to net-zero levels, and prevent CO₂ rising further. 

Links

• Coral time machines reveal ancient carbon dioxide burps
• Atmospheric CO2 over the Past 66 Million Years from Marine Archives
• By 2025, carbon dioxide levels in Earth's atmosphere will be higher than at any time in the last 3.3 million years
• Antarctic Ocean carbon dioxide helped end the Ice Age
• Dire future etched in the past: CO2 at 3-million year-old levels
• Heat-trapping carbon dioxide in air hits new record high

(USA Salon) Humans Are Causing Mass Extinction At A Rate Not Seen Since The Last Major Extinction Event

Salon - Matthew Rozsa

A new study suggests that we are entering a period of mass extinction comparable to the one 66 million years ago

Bleached coral on the Great Barrier Reef outside Cairns Australia during a mass bleaching event, thought to have been caused by heat stress due to warmer water temperatures as a result of global climate change. (Getty Images/Brett Monroe Garner)

Author Matthew Rozsa is a staff writer for Salon. He holds an MA in History from Rutgers University-Newark and is studying for a PhD  in History.

Roughly 66 million years ago, an asteroid or comet struck the planet and wiped out three-quarters of every animal and plant species alive.

Known as the Cretaceous–Paleogene extinction event (K–Pg), it has been immortalized in popular culture because of its association with the end of the dinosaurs' reign on Earth.

That is why scientists are hopeful that a new study regarding the rate of extinction nowadays may hammer home the urgency of our pollution problems.

In an international study led by the Justus Liebig University Giessen that included geologists, paleontologists, evolutionary biologists and many others, researchers found that in some cases, man-made factors are causing an extinction rate that surpasses that of the Cretaceous–Paleogene extinction event.

The study, which was published last month in the journal Communications Earth & Environment, closely analyzed past extinction rates for freshwater animals and plants, then used that information to extrapolate likely future extinction rates.

They discovered that the average predicated rate for freshwater animals and plants today is three orders of magnitude higher than it was during the Cretaceous–Paleogene extinction event. If current trends continue unabated, one-third of all freshwater species alive today may be forever gone by 2120.

If that happens, we can expect that the damage to our freshwater ecosystem — which, inevitably, has an impact on ecosystems everywhere else on the planet — will be effectively permanent.

"Our results indicate that, unless substantial conservation effort is directed to freshwater ecosystems, the present extinction crisis will have a severe impact to freshwater biota for millions of years to come," the authors write.

Even after the extinction event itself abated, the extinction rate remained high for 5.4 million years; the ecological recovery period required another 6.9 million years. Hence, the authors believe that our current situation might be comparable. Even if the man-made impact on life on Earth "ceases immediately, the already triggered phase of extinction might still involve several million years," they write. 

Speaking to the Naturalis Biodiversity Center, the study's lead author Dr. Thomas A. Neubauer explained that "losing species entails changes in species communities and, in the long run, this affects entire ecosystems. We rely on functioning freshwater environments to sustain human health, nutrition and fresh water supply." He added that "despite our short existence on Earth, we have assured that the effects of our actions will outlast us by millions of years."

In the study itself, the authors explained that the extinction crisis "has consequences on many levels," noting that smaller changes compound into larger ones that eventually have devastating consequences.

"Radical changes in ecosystem functioning, in turn, may have severe implications on ecosystem services for humanity, such as food provision, disease resistance or economic benefits," the authors write. "Thus, if we continue to lose species at the fast pace our analysis suggests, we will continue to impair ecosystem services to our own disadvantage."

The new study is one of many red flags being thrown up by the planet about a number of pollution issues that threaten our survival. A February report by the World Wide Fund for Nature (WWF) and Global Wildlife Conservation revealed that roughly one-third of the world's 18,075 freshwater fish species face possible extinction.

The reasons for this include climate change, the introduction of invasive species, habitat destructions, pollution, and overly aggressive draining and damming. 

In September a report by the World Wildlife Fund (WWF) found that overall population sizes of "mammals, birds, amphibians, reptiles and fish" have dropped by 68 percent since 1970, indicating that the planet "is being destroyed by us at a rate unprecedented in history."

Some scholars have already coined a term, Anthropocene, to describe the geological epoch brought about by climate change and marked by the proliferation of mass extinctions. We are already in the midst of what scientists refer to as the Holocene extinction, or the sixth known mass extinction event in the Earth's history, this one due to human activity.

Links

• Biodiversity devastation: Human-driven decline requires millions of years of recovery 
• Current extinction rate in European freshwater gastropods greatly exceeds that of the late Cretaceous mass extinction
• Fishpocalypse? One-third of freshwater fishes are threatened with extinction, study says
• Humans are destroying wildlife at an "unprecedented" rate, World Wildlife Fund report warns
• Top scientists warn of 'ghastly future of mass extinction' and climate disruption
• Biodiversity loss puts our food supplies and medical care at risk. It must be stopped
• UN Report: Nature’s Dangerous Decline ‘Unprecedented’; Species Extinction Rates ‘Accelerating’
• Living Planet Report 2020