Feature
Issue No. 28 - April/May 2006
Clear risk brings climate change among investors
National law practice Phillips Fox is proactively advising on climate change and resource management, with two specialist senior members of the practice prominent speakers at the conferences in Adelaide last month.
Melbourne-based Phillips Fox members, Sean Lucy (Practice Leader, Climate Change), and Mark Bartley, a specialist in innovative practices for optimising water rights, allocation and pricing, highlighted risks and proposed solutions to problems that are no longer over the horizon.
During the conference, all speakers asserted that the business community wants to see clear public policy on climate change in order to make effective long-term investment decisions.
Climate change specialist Sean Lucy articulated the business priority: to factor in climate change to secure long-term portfolio value and stable returns on investment. Climate change, a destabilising element, had attendant risk that could harm business through regulatory change or physical damage.
But grappling with climate change also represents an opportunity. Opportunities could come from regulation, like that arising from carbon assets arrangements; new product and service offerings regarding climate change will open new markets.
Investors seeking to reduce risk and capture the opportunity needed reliable information to do it.
While Australia stands outside the formal Kyoto accord on carbon emission management, carbon regulation is appearing at federal and state levels.
In the USA, investors have begun to use shareholder resolutions to force large public companies to adopt carbon offset measures, leading to confrontations as shareholders push companies to live up to legal obligations.
This is unlikely to happen here, but Australian companies law requires disclosure to show a true and fair view of a firm’s regulatory position. Financial reports must detail issues that effect a company’s value and provide investors with sufficient ...
