Following on from this panel, Ethical Partners spoke directly with the Assistant Federal Treasurer, the Hon. Stephen Jones, to express our strong support of the reforms, albeit with the acknowledgment that there are improvements still to be made to the policy over time. Ethical Partners was also pleased to provide feedback to and support the IGCC’s submission on the Safeguard Mechanism through our involvement in the Policy and Advocacy Working Group.
We were proud to be one of the 12 signatories to the Safeguard Mechanism Reforms: Joint Finance Industry Statement which welcomed the Government’s proposal to reform the Safeguard Mechanism, whilst still noting that the emissions reductions required under the Safeguard Mechanism are not yet aligned with the reductions needed to limit global warming to 1.5 degrees and considering that the Safeguard Mechanism should be a floor, not a ceiling, to facilities’ decarbonisation activities.
The statements further proposed three recommendations for measures that would complement and bolster the proposed Safeguard Mechanism reforms:
- The first, that mirror our submission to the recent climate related financial disclosures consultation, being that large firms, including all those with facilities captured by the Safeguard mechanism, be required to develop and publish credible, consistent and comparable transition plans in line with guidance to be developed by the Government. Importantly, we also advocated that these plans should include the role that offsets will play in a companies’ decarbonisation – a critical consideration given that the Safeguard Mechanism allows facilities to use Australian Carbon Credit Units to meet emissions targets.
- The Government task and establish clear terms of reference for the Climate Change Authority to develop 1.5 degree aligned sector targets and pathways to 2050, in consultation with relevant stakeholders, by mid-2024. Ethical Partners was also pleased to be able to speak directly with the Climate Change Authority recently through our involvement in the IGCC Policy and Advocacy Working Group.
- Future Safeguard Mechanism baselines align with 1.5-degree decarbonisation pathways.
Internally, we continue to assess the impact of the proposed safeguard mechanism on all relevant ASX listed companies through our proprietary EPORA and EPCAP investment processes, and to engage on this meaningful policy change, its implications for carbon pricing and carbon value at risk across the market, the need for accelerated decarbonisation and the critical need for credible, consistent, and comparable transition plans, with a minimal use of offsets, in our active company engagements.
Download the full investor statement below.
