Anna Skarbek, CEO of Climateworks Centre, introduces the organisation’s 2022 impact report.
In 2022, the global community held firm in its commitment to a net zero future, amidst a challenging year with continued impacts from the COVID pandemic, war in Ukraine, energy security concerns and rising living costs worldwide.
Climateworks saw, first-hand, leaders at the G20 and COP27 reaffirm the 1.5-degree Celsius Paris Agreement goal and commit to a just transition for communities vulnerable to the worst impacts of climate change.
Australia’s federal election marked an inflection point, with every major party’s platform including a formal, economy- wide commitment to net zero emissions. Still, states and territories continued to set the pace for Australia’s transition to renewable energy and zero emission vehicles, as shown in our policy assessment of government climate action in 2022.
Corporate and financial institutions, buoyed by a supportive political environment, expanded their horizons to consider scope 3 emissions and their alignment to science-based targets, as evident in our analysis of, and work with, corporates across Australia.
Significant financial and political clout coalesced in the Asia– Pacific region with the launch of the Glasgow Financial Alliance for Net Zero (GFANZ) regional network, where Climateworks is pleased to have a voice on the advisory board.
The roots of a net zero future are taking hold, all around us. Now, we need to ensure that this future comes to pass. As you’ll see from these highlights of our impact from 2022, Climateworks is taking on the transition to net zero by targeting the change we need to see with government, companies and institutions.
Influencing government’s climate agendas
In 2022, we seized opportunities to shape governmental net zero implementation.
In Australia, Climateworks met with and advised new federal and state governments in more than 50 briefing sessions and 11 submissions where we recommended ambitious coordinated action informed by our evidence and experience. Our advice was reflected in several policy announcements this year, including the Victorian Government setting the strongest emissions reduction goals of any large Australian state.
In Indonesia, our team co-led sessions for the G20 Energy Transition Working Group to consider using Islamic endowments for renewable energy investment, leading to recommendations that Indonesia’s Vice President endorsed. We also led the development of an environmental, social and governance (ESG) framework for the Indonesian Financial and Development Supervisory Board, BPKP, an agency with supervisory power over the country’s state owned enterprises representing 53 per cent of the economy and tasked with supporting the President’s commitment to transition the nation to net zero.
Striving to limit warming to 1.5°C
Since the Paris Agreement in 2015, research has shown that each increment of temperature rise has significant consequences for the frequency and severity of extreme weather events – every tenth of a degree matters. Action in line with limiting warming to 1.5°C is imperative, so we continue to hold that standard across our analysis and engagement.
In 2022, our 1.5°C benchmarks informed commitments and strategies throughout Australia, including by the Australian Council of Superannuation Investors, Westpac, the Australian Energy Market Operator, Australasian Centre for Corporate Responsibility and others. The year marked the completion of a three-year effort by the Australian Industry Energy Transitions Initiative, co-convened by Climateworks, to create 1.5°C-aligned net zero pathways for heavy industry supply chains. We also provided many executive briefings on Australia’s 1.5°C pathway, including to the ASX CEOs in the Climate Leaders Coalition, who endorsed 1.5°C-alignment for value chain, or ‘indirect’, emissions. We assessed the climate commitments of 187 of Australia’s largest companies against a 1.5°C pathway, through our updated Net Zero Momentum Tracker. This tool helps identify which ASX200 companies are leading and where more attention can be focused in the future.
We chose where to apply our efforts based on our whole-of-economy perspective and our sectoral pathways analysis. Our multi-year efforts to affect changes to the National Construction Code – as a means to reduce emissions in the buildings sector – came to fruition in 2022, with the code’s first upgrade to energy efficiency requirements in more than a decade. Similarly, our latest electric vehicle uptake report built on more than 10 years of Climateworks research and coalition-building around fuel efficiency standards. The report was released ahead of the 2022 National Electric Vehicle Summit as part of a chorus urging for standards, which were initiated at the summit. Policy changes like these are vital in the transition to net zero, but it can take years to build the evidence and influence to enact the change, so it is only one of the ways we pursue system-wide change.
Embedding climate action into the ‘rules of the games’
To accelerate the transition we also pursued interventions that embed net zero in the ‘rules of the game’ in key economic sectors. In 2022, we focused on capacity building for those sectors facing a change in the way they operate to meet new emissions reduction imperatives.
This included working with Australia’s biggest banks and consultancies to transfer our specialist knowledge on net zero emissions pathways to these organisations, particularly important given their wide reach and influence in the business community. We partnered for director briefing sessions and created new scalable and modular business training for embedding net zero. We delivered over 100 hours of training to more than 1,000 senior institutional banking staff on what it means for a company to be 1.5°C-aligned and how bank employees can support their corporate customers.
Our work with Indonesia’s financial auditor BPKP included a range of capacity-building efforts to bring hundreds of auditors up to speed on how to measure climate and sustainability across the country’s more than 600 government agencies and state-owned enterprises. Climateworks also teamed up with Filantropi Indonesia to build climate knowledge for some of Indonesia’s largest philanthropic donors. We are providing technical assistance and best-practice examples from the region.
Working with the ASEAN Centre for Energy, supported by the Department of Foreign Affairs and Trade’s (DFAT) Partnership for Infrastructure, we hosted workshops for senior energy or climate ministry staff from all 10 ASEAN member states, strengthening their capacity to plan and finance net zero energy systems that will support nationally determined contributions (NDCs). The sessions, supported and opened by the Australian Ambassador to ASEAN and the Director of Singapore’s Energy Market Authority, marked a deepening Australia–ASEAN collaboration.
Stepping into 2023
With Indonesia taking up chairmanship of the ASEAN member states in 2023 as well as holding a presidential election in 2024, our team in Jakarta is well placed and excited to help Indonesia create and finance a just energy transition and lead the region to do the same.
At the end of 2022, we hired a new Southeast Asia Lead to guide our expanding efforts in the region. This year we will implement an ambitious strategy for Southeast Asia’s climate transition, building the partnerships and presence we need to support it.
Climateworks will continue to guide governments, financial institutions and industry towards more ambitious emissions reduction trajectories. Globally, the race is on for such commitments to be acted on, and urgently. This includes driving suitable investments and policies aligned with science to achieve zero emissions in all sectors. Climateworks is now focused on enabling the necessary shift from commitment to implementation.
We will do this by providing pathways and analysis, making connections and building capacity in those people and institutions with the power to reduce emissions at scale, and influencing the alignment to Paris Agreement goals in core ‘rules of the game’ in governments and industry.
CEO, Climateworks Centre