This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Even as unprecedented fires and heat waves rage across Europe, scientists track the retreat of Antarctic sea ice and a supercharged El Niño system heads our way, Australia's largest companies are forecasting business as usual in a much hotter world. Last year, Australia introduced mandatory company climate reporting.
Companies must now disclose the climate "risks and opportunities" that may affect their prospects. Several of Australia's biggest energy and resource companies have now published new sustainability reports as part of their annual financial reporting. Their disclosures reveal the climate future they are planning for and whether it is aligned with international science-based targets such as the Paris Agreement's 1.5°C warming threshold.
Most of these reports indicate big companies are developing strategies based on a climate change "base case"—a representation of what they consider most likely to happen—of more than 2°C of warming. The future temperature rise they're planning for is one scientists say would deliver an unbearably hot planet. Some of Australia's largest miners have followed this approach.
Both Rio Tinto and BHP expect global temperature increases of more than 2°C by the end of the century. Not every company reveals the increase in global temperature it is planning for. But even if they don't, their disclosures show they're not expecting temperatures to remain at 1.5°C.
Energy companies AGL and Origin Energy both express confidence their strategies and business models will remain robust, even if warming accelerates beyond 2.6°C. This increase would put the Australian economy, environment and community at severe risk. Companies often argue that governments are responsible for creating policy to address global warming.
But this underestimates the power corporate leaders hold to shape Australia's shared climate future through financial decisions. For example, mining giant BHP expects demand for steelmaking coal to remain robust for decades, with customers from China, India and Southeast Asia. This underpins the valuation of its major export commodities and appears to justify the lack of plans to scale down steelmaking coal production.
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