Climate risk legal advice coincided with military capability warning

Top-shelf legal advice warning company directors have a duty to act on climate change risk was studied by the federal government as recently as June and coincided with warnings from the military about its capabilities being stretched due to global warming.

Sources have told The Australian Financial Review that the advice, first prepared in 2016 by barristers Noel Hutley, SC and Sebastian Hartford Davis, was studied carefully by the government amid concerns there may be implications for government decision makers.

It is believed these concerns were minimal given the advice applies  specifically to directors and their obligations under the Corporations Act.

Nonetheless, according to sources who attended a secret, invitation-only retreat in regional NSW in June for managers from government departments and agencies, the legal advice was on the agenda.

At that retreat, Defence Force Chief Angus Campbell used a speech to warn climate change would stretch the capabilities and resources of the military on several fronts.

These ranged from disaster response to being drawn into escalating global conflicts, to managing relations in the Pacific made increasingly tense over Australia's relative inaction over climate change.

According to speech notes obtained by the ABC under a Freedom of Information request, General Campbell said, for example, that responding to climate change disasters required more troops than were sent to Afghanistan.

The notes warned there would be more disaster relief efforts and more peace-keeping missions, given climate change has "the potential to exacerbate conflict".

More broadly, the government looked at the advice in terms of the duties of directors and how, or if, they applied to the public sector and who was responsible for decisions.

Two key questions which arose were:  What implications did climate change and future climate change have for government agencies, especially the final decision maker?

And, did a person involved with approving grants, for example to a local council, have to consider climate change risk.

As revealed by The Financial Review on Monday, former High Court Judge and royal commissioner Kenneth Hayne reinforced the opinion of Hutley and Davis at a private event on November 21, hosted by the Centre for Policy Development.

Mr Hayne said that directors had a legal duty to act on climate risk, include it in corporate strategies and report on it to shareholders. He also took a swipe at the Morrison government for its unambitious policy response to climate change.

Liberal MP Tim Wilson rejected the criticism.

"The Australian Government does have an ambitious target to reduce our greenhouse gas emissions, in line with our commitments internationally, and that’s the platform that we took to the election,'' he told Sky News.

"There were other platforms taken to the election, so if you want to discredit democracy and pay little attention to that you can follow his course of action, or you can take the public with you."

Greens Treasury spokesman Peter Whish-Wilson said a new commitment by Anthony Albanese to back coal exports was "in stark contrast" to Mr Hayne's warning.

“Albanese cheering for coal exports is shirking responsibility and undermining the financial regulator’s warning that companies need to manage climate risk.

“Australian companies need to act now on climate risk and the leader of the Opposition should be doing everything to encourage this rather than perpetuating a ‘learned hopelessness’ around Australia’s responsibilities.”